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Yes, this[1] was the one that I found when searching. It shows that Robinhood is it's own, but as we know they route to Citadel. A bunch of others had a proble

by vertis 6y ago

Yes, this[1] was the one that I found when searching. It shows that Robinhood is it's own, but as we know they route to Citadel. A bunch of others had a problem when Apex Holdings told them to restrict trading (or something along those lines). [1]: https://investorjunkie.com/stock-brokers/broker-clearing-firms/ https://investorjunkie.com/stock-brokers/broker-clearing-fir...

Daho0n 6y ago
How come it works from all the way over here in Scandinavia? No problems with GME while RH was shutting it down. Also, Robin Hood - the irony. They are clearly for the rich against the poor. More like the sheriff of nottingham!
- gruez 6y ago
  >How come it works from all the way over here in Scandinavia? No problems with GME while RH was shutting it down. Maybe because there's already a high barrier to trading US stocks (or stocks in general), so there wasn't enough people piling on to strain the brokerage's balance sheets?
  - egwor 6y ago
    Agreed. Probably highly likely that few others using that broker were involved.
- Gwypaas 6y ago
  Because we buy stocks on the open market paying courtage for someone to execute the trade.
- capableweb 6y ago
  I'm also in a European country and using my national bank for trading. In the end, my bank is using JP Morgan for NYSE trades, so in the end would be up to JP Morgan to block trades. But everything seems to have worked fine here all week.
- jonp888 6y ago
  Just luck. Trade Republic, a Robin-hood-alike in Germany, also had to shut down GME purchases.
tptacek 6y ago
This subthread is confusing clearinghouses, clearing brokers, and execution brokers. Citadel is an execution broker. Their job is to match buyers and sellers. Apex (in these conversations) is a clearing broker. Robinhood is its own clearing broker. Clearing brokers are responsible for ensuring that money and stock actually changes hands (this takes 2 days, but all of these firms work together to create the illusion, using credit, that it's instant; those credit arrangements are why brokerages post collateral). Clearing brokers are members of clearinghouses. The relevant one here is (I think) NSCC, which is owned by DTCC. Policy set at DTCC determines how much collateral needs to be posted to cover any particular set of trades. DTCC drastically ratcheted up the amount of collateral required to cover trades in meme stocks, which had the effect of 10x'ing the amount of cash Robinhood was required to post to insure that it would not go out of business before its current set of in-flight trades cleared. It made the same requirement of Apex, which passed restrictions down to its customers. These companies are contractually required to make good on collateral requirements, so there isn't much choice involved.
doanerock 6y ago
The problem is not the cleaning houses, this article explains it really good https://www.bloombergquint.com/markets/clearing-firms-prevent-cascading-failures-q-a-with-larry-tabb https://www.bloombergquint.com/markets/clearing-firms-preven... So there are couple of issues, one is the two day settlement, the other is increased capital requirements put in by DTCC.

by vertis 6y ago

Daho0n 6y ago

How come it works from all the way over here in Scandinavia? No problems with GME while RH was shutting it down. Also, Robin Hood - the irony. They are clearly for the rich against the poor. More like the sheriff of nottingham!

gruez 6y ago
>How come it works from all the way over here in Scandinavia? No problems with GME while RH was shutting it down. Maybe because there's already a high barrier to trading US stocks (or stocks in general), so there wasn't enough people piling on to strain the brokerage's balance sheets?
- egwor 6y ago
  Agreed. Probably highly likely that few others using that broker were involved.
Gwypaas 6y ago
Because we buy stocks on the open market paying courtage for someone to execute the trade.
capableweb 6y ago
I'm also in a European country and using my national bank for trading. In the end, my bank is using JP Morgan for NYSE trades, so in the end would be up to JP Morgan to block trades. But everything seems to have worked fine here all week.
jonp888 6y ago
Just luck. Trade Republic, a Robin-hood-alike in Germany, also had to shut down GME purchases.

tptacek 6y ago

This subthread is confusing clearinghouses, clearing brokers, and execution brokers. Citadel is an execution broker. Their job is to match buyers and sellers. Apex (in these conversations) is a clearing broker. Robinhood is its own clearing broker. Clearing brokers are responsible for ensuring that money and stock actually changes hands (this takes 2 days, but all of these firms work together to create the illusion, using credit, that it's instant; those credit arrangements are why brokerages post collateral). Clearing brokers are members of clearinghouses. The relevant one here is (I think) NSCC, which is owned by DTCC. Policy set at DTCC determines how much collateral needs to be posted to cover any particular set of trades. DTCC drastically ratcheted up the amount of collateral required to cover trades in meme stocks, which had the effect of 10x'ing the amount of cash Robinhood was required to post to insure that it would not go out of business before its current set of in-flight trades cleared. It made the same requirement of Apex, which passed restrictions down to its customers. These companies are contractually required to make good on collateral requirements, so there isn't much choice involved.

doanerock 6y ago

The problem is not the cleaning houses, this article explains it really good https://www.bloombergquint.com/markets/clearing-firms-prevent-cascading-failures-q-a-with-larry-tabb https://www.bloombergquint.com/markets/clearing-firms-preven... So there are couple of issues, one is the two day settlement, the other is increased capital requirements put in by DTCC.