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It's client money until it settles.

• zaroth 6y ago
  Assuming this is true, what the brokerage needs to do is take a loan against the settled cash they are already holding in escrow for ~24 hours. Suppose a 3% interest rate (which seems high for guaranteed cleared funds), $1 billion for 24 hours is $82,000.
  • stu2b50 6y ago
    The Broker isn't allowed to borrow against client money either - it's client money, partitioned off from the broker's fungible funds, and not the Broker's to offer as collateral. But debt is the natural answer, and Robinhood did get as much in loans as they can[0]. [0]https://finance.yahoo.com/news/robinhood-said-draw-credit-lines-214509076.html https://finance.yahoo.com/news/robinhood-said-draw-credit-li...
  • gruez 6y ago
    >what the brokerage needs to do is take a loan against the settled cash they are already holding in escrow for ~24 hours. and that's exactly what they did. On thursday night they secured a $1B loan.
    • sokoloff 6y ago
      That's not exactly what they did. What they did was to get $1B in funding against other assets that are actually theirs. Just because your house is worth $1M doesn't mean that I (being "not you") can go get a mortgage pledging your house as collateral.