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Robinhood sent this email not long ago to me, but this also seems to be inline with what analysts on TV were saying, basically they very likely had to halt trad

Robinhood sent this email not long ago to me, but this also seems to be inline with what analysts on TV were saying, basically they very likely had to halt trading because the company may not have been able pay its obligations if it didn't temporary suspend these volatile trades and possibly become insolvent. > As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today. > To be clear, this decision was not made on the direction of any market maker we route to or other market participants.

vkou 6y ago
> Robinhood sent this email not long ago to me, but this is also what analysts on TV were saying, basically they likley had to halt trading because the company may not have been able to exist and pay its obligations if it didn't temporary suspend these volatile trades. I smell bullshit. These are long positions, these aren't options, or trades on margin. Robinhood, and its settlement network (As well as other exchanges, who have stopped retail traders from buying GME) carries effectively no risk for settling buys and sells in them.
- res0nat0r 6y ago
  Here is what I saw this morning and what I'm referencing: https://youtu.be/LAHLifZzKmg?t=170 https://youtu.be/LAHLifZzKmg?t=170 Basically so many shorts were sold, way more than what exists when trying to cover them, the cover would fail, the clearinghouse would raise the margin rates of Robinhood so much if this kept happening that it would cause them to go out of business.
  - vkou 6y ago
    I'm not entirely sure if I'm the idiot, or if the talking lady on television is, but what she is saying sounds like complete nonsense. It sounds like nonsense, because what she's describing is not Robinhood's problem. The shorts are predominantly being done by hedge funds (with only a few retail investors here and there). Hedge funds aren't trading on retail platforms, like Robinhood. It's not Robinhood's problem that the hedge funds are being eaten alive on margins, or if the hedge funds are having problems with the clearing houses. If margins, and the Robinhood/clearing house relationship were the problem, then Robinhood would stop people from opening new margin positions on GME. But that's not the case, here. They are preventing people from entering non-margin long positions. Do you have a different take on this? Edit: https://news.ycombinator.com/item?id=25951475 https://news.ycombinator.com/item?id=25951475 seems to be a different take on this. One that makes a lot more sense then the lady on television. The tl;dr of it is that even for a simple, non-margin stock trade, RobinHood needs to put dollars up as collateral... And they ran out of dollars.
    - res0nat0r 6y ago
      https://en.wikipedia.org/wiki/Stephanie_Ruhle https://en.wikipedia.org/wiki/Stephanie_Ruhle

vkou 6y ago

> Robinhood sent this email not long ago to me, but this is also what analysts on TV were saying, basically they likley had to halt trading because the company may not have been able to exist and pay its obligations if it didn't temporary suspend these volatile trades. I smell bullshit. These are long positions, these aren't options, or trades on margin. Robinhood, and its settlement network (As well as other exchanges, who have stopped retail traders from buying GME) carries effectively no risk for settling buys and sells in them.

res0nat0r 6y ago
Here is what I saw this morning and what I'm referencing: https://youtu.be/LAHLifZzKmg?t=170 https://youtu.be/LAHLifZzKmg?t=170 Basically so many shorts were sold, way more than what exists when trying to cover them, the cover would fail, the clearinghouse would raise the margin rates of Robinhood so much if this kept happening that it would cause them to go out of business.
- vkou 6y ago
  I'm not entirely sure if I'm the idiot, or if the talking lady on television is, but what she is saying sounds like complete nonsense. It sounds like nonsense, because what she's describing is not Robinhood's problem. The shorts are predominantly being done by hedge funds (with only a few retail investors here and there). Hedge funds aren't trading on retail platforms, like Robinhood. It's not Robinhood's problem that the hedge funds are being eaten alive on margins, or if the hedge funds are having problems with the clearing houses. If margins, and the Robinhood/clearing house relationship were the problem, then Robinhood would stop people from opening new margin positions on GME. But that's not the case, here. They are preventing people from entering non-margin long positions. Do you have a different take on this? Edit: https://news.ycombinator.com/item?id=25951475 https://news.ycombinator.com/item?id=25951475 seems to be a different take on this. One that makes a lot more sense then the lady on television. The tl;dr of it is that even for a simple, non-margin stock trade, RobinHood needs to put dollars up as collateral... And they ran out of dollars.
  - res0nat0r 6y ago
    https://en.wikipedia.org/wiki/Stephanie_Ruhle https://en.wikipedia.org/wiki/Stephanie_Ruhle