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https://www.cnbc.com/2021/01/28/interactive-brokers-restricted-gamestop-trading-to-protect-the-market-says-chairman-peterffy.html https://www.cnbc.com/2021/01/2

https://www.cnbc.com/2021/01/28/interactive-brokers-restricted-gamestop-trading-to-protect-the-market-says-chairman-peterffy.html https://www.cnbc.com/2021/01/28/interactive-brokers-restrict... “The broker stands between these customers and the clearing house,” said Peterffy. “So when some option holders make money, the clearing house has to give us the money to give it to our customers, while other option holders, sellers or buyers on their own side lose money we have to collect money from them and give it to the clearing house. If our customers are unable to pay for their loses we have to put up our own money.” Explanation from the CEO of Interactive Brokers, which also limited GME trading.

kasey_junk 6y ago
Note Robinhood clears themselves so the same dynamic applies but is more direct.
llbeansandrice 6y ago
This makes sense to me in terms of restricting buying on margin. But plenty of people put their own money into RH accounts and were buying stock. I don't see how that's relevant to RH paying a clearing house? I suppose they had a huge influx of new accounts and RH gives you an advance up to like $1000 before the money is actually moved from your bank account and into your brokerage account but I'm still skeptical that this reasonably leads to "not supporting" stocks.
- deleted 6y ago
  [deleted]
- kahrl 6y ago
  You are correct. It's not relevant.
lovehashbrowns 6y ago
But when you buy a stock, like just straight up purchase it, the cash is already there, on-hand, in your account. There's no Robinhood putting up their own money because YOUR cold hard cash is there, in the RH account. That is used for the purchase. So why stop people from buying the stocks? This answers my question, I think: https://news.ycombinator.com/item?id=25951475 https://news.ycombinator.com/item?id=25951475
svnt 6y ago
He was reading that off his screen. When the interviewer pressed him on why they did it he said “We did it to protect ourselves... and also of course our customers” in his best Disney villain voice.

kasey_junk 6y ago

Note Robinhood clears themselves so the same dynamic applies but is more direct.

llbeansandrice 6y ago

This makes sense to me in terms of restricting buying on margin. But plenty of people put their own money into RH accounts and were buying stock. I don't see how that's relevant to RH paying a clearing house? I suppose they had a huge influx of new accounts and RH gives you an advance up to like $1000 before the money is actually moved from your bank account and into your brokerage account but I'm still skeptical that this reasonably leads to "not supporting" stocks.

deleted 6y ago
[deleted]
kahrl 6y ago
You are correct. It's not relevant.

lovehashbrowns 6y ago

But when you buy a stock, like just straight up purchase it, the cash is already there, on-hand, in your account. There's no Robinhood putting up their own money because YOUR cold hard cash is there, in the RH account. That is used for the purchase. So why stop people from buying the stocks? This answers my question, I think: https://news.ycombinator.com/item?id=25951475 https://news.ycombinator.com/item?id=25951475

svnt 6y ago

He was reading that off his screen. When the interviewer pressed him on why they did it he said “We did it to protect ourselves... and also of course our customers” in his best Disney villain voice.