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Robinhood does clearing by itself. Webull uses a partner company for clearing. But still, I think that there are legitimate factors for why Robinhood stopped t
by einrealist 6y ago
Robinhood does clearing by itself. Webull uses a partner company for clearing.
But still, I think that there are legitimate factors for why Robinhood stopped taking buy orders for those stocks, like ensuring liquidity through clearinghouse deposits while trades are underway.
- 6nf 6y agoI thought RH used Citadel
- einrealist 6y agoThey write about it in their FAQs: https://robinhood.com/us/en/support/articles/whats-clearing-by-robinhood/ https://robinhood.com/us/en/support/articles/whats-clearing-...
- sangnoir 6y agoTo my knowledge, RH sells its users' order flow to Citadel (which is how they make money).
- andylei 6y agoclearing is totally separate from flow
- youeseh 6y agoYes, the factors are governed by how they make money. If one is not the customer, then they are the product!
- nrmitchi 6y agotldr; even if Robinhood does it's own clearing (which I'm not suggesting they don't) it's reasonable to not risk their business to support the current market. Does "the market can remain irrational longer than Robinhood can remain solvent" apply here? Any valid argument that would cause another clearing house to not be able to afford to handle these orders would seemingly-equally apply to Robinhood's own clearing house; no matter who owns it, the clearing house can't afford to go broke. If someone is arguing that Robinhood should have the risk tolerance and reserves of a larger financial institution in order to service high volatility trades.... then maybe that person should use a larger financial institution to place these high volatility trades.