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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 s
by 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 agoI'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 agohttps://en.wikipedia.org/wiki/Stephanie_Ruhle https://en.wikipedia.org/wiki/Stephanie_Ruhle