6 ms·

The problem with this theory is that it wasn’t just Robinhood. There were literally like a dozen or so firms that halted buying. Some of which were well known l

The problem with this theory is that it wasn’t just Robinhood. There were literally like a dozen or so firms that halted buying. Some of which were well known long established firms (Merrill, etrade). These firms should have had no problem continuing allowing purchasing.

nverno 6y ago
The article discusses this- excess buys and market volatility lead to increased capital requirements by clearing houses, so it wasn't necessarily specific to robinhood.
- Hacker29382 6y ago
  When powerful people need to bend the rules, they don't do it outright. They find cover. And if there's any discretion in how much liquidity clearinghouses require, that's what they'll modify. You'll see similar things when influence is sold. Speakers are given huge fees for basic speeches and then they know what they should do. Nothing is spelled out, because that would be dumb.
  - astrange 6y ago
    If you gave me a lot of money, I wouldn’t need to do anything for you because I’ve already got your money ;)
    - Hacker29382 6y ago
      Are you saying that influence either isn't sold or is spelled out in explicit terms when it is? Why do pharm reps take medical residents out to expensive dinners in nice parts of town (pre-covid), are they just nice people?
      - astrange 6y ago
        Giving someone a nice dinner isn’t giving them a lot of money, though. You get influence by not paying people enough that they can leave, but making it seem like you might in the future. And yes, most marketing spending is pointless, and that’s just another kind of marketing.
soared 6y ago
> These firms should have had no problem continuing allowing purchasing. Their costs increased 50x overnight - so they definitely should have had problems. DTC required a few percent collateral, and then overnight required 100% collateral on $GME. No business (well, fidelity and a few others weathered it) is able to increase short term liquidity 50x overnight.
- Rebelgecko 6y ago
  Couldn't they just add a requirement that GME can only be purchased with settled funds? That seems like it would solve the issues mentioned above
  - Dma54rhs 6y ago
    Settled funds means two days that is longer than the whole situation. It was mainly new money anyway so the accusations and anger would be the same?
- criddell 6y ago
  Their CEO went on CNN and stated there were no liquidity problems at RH.
  - astrange 6y ago
    He said they’d used their credit lines, just that there wasn’t enough of a liquidity problem to affect the rest of the business. And then they got another $1B the next day.
JumpCrisscross 6y ago
> There were literally like a dozen or so firms that halted buying My understanding is these firms halted buying on margin. Did anyone else halt for non-margin accounts?
- midasuni 6y ago
  EToro in U.K. halted it - no margin account, we have instant transfers of cash. Managed to buy $beermoney worth in the end to say I was there, although that was at 20% higher than I tried to (not that it matters)
  - iamacyborg 6y ago
    They’re a cfd broker aren’t they?
- thefounder 6y ago
  They halted buy on stocks(no margin) on Interactive Brokers which powers most of the retail apps in Europe. I think the other brokers did the same. If you listen to this guy it's pretty clear he'a protecting the hedge funds. "If our customers loose money we have to put ours" https://m.youtube.com/watch?v=7RH4XKP55fM https://m.youtube.com/watch?v=7RH4XKP55fM
  - rusticpenn 6y ago
    Looks more like he is trying to protect his company. ( If the Hedge fund or clearance house fails, the broker would loose a lot of money).
    - thefounder 6y ago
      Yeah, better let the retailers loose..not market manipulation, just driving the stock to the right price where both the broker and the hedge wins. I wouldn't call this a free market.
      - 6y ago
deleted 6y ago
[deleted]

nverno 6y ago

The article discusses this- excess buys and market volatility lead to increased capital requirements by clearing houses, so it wasn't necessarily specific to robinhood.

Hacker29382 6y ago
When powerful people need to bend the rules, they don't do it outright. They find cover. And if there's any discretion in how much liquidity clearinghouses require, that's what they'll modify. You'll see similar things when influence is sold. Speakers are given huge fees for basic speeches and then they know what they should do. Nothing is spelled out, because that would be dumb.
- astrange 6y ago
  If you gave me a lot of money, I wouldn’t need to do anything for you because I’ve already got your money ;)
  - Hacker29382 6y ago
    Are you saying that influence either isn't sold or is spelled out in explicit terms when it is? Why do pharm reps take medical residents out to expensive dinners in nice parts of town (pre-covid), are they just nice people?
    - astrange 6y ago
      Giving someone a nice dinner isn’t giving them a lot of money, though. You get influence by not paying people enough that they can leave, but making it seem like you might in the future. And yes, most marketing spending is pointless, and that’s just another kind of marketing.

soared 6y ago

> These firms should have had no problem continuing allowing purchasing. Their costs increased 50x overnight - so they definitely should have had problems. DTC required a few percent collateral, and then overnight required 100% collateral on $GME. No business (well, fidelity and a few others weathered it) is able to increase short term liquidity 50x overnight.

Rebelgecko 6y ago
Couldn't they just add a requirement that GME can only be purchased with settled funds? That seems like it would solve the issues mentioned above
- Dma54rhs 6y ago
  Settled funds means two days that is longer than the whole situation. It was mainly new money anyway so the accusations and anger would be the same?
criddell 6y ago
Their CEO went on CNN and stated there were no liquidity problems at RH.
- astrange 6y ago
  He said they’d used their credit lines, just that there wasn’t enough of a liquidity problem to affect the rest of the business. And then they got another $1B the next day.

JumpCrisscross 6y ago

> There were literally like a dozen or so firms that halted buying My understanding is these firms halted buying on margin. Did anyone else halt for non-margin accounts?

midasuni 6y ago
EToro in U.K. halted it - no margin account, we have instant transfers of cash. Managed to buy $beermoney worth in the end to say I was there, although that was at 20% higher than I tried to (not that it matters)
- iamacyborg 6y ago
  They’re a cfd broker aren’t they?
thefounder 6y ago
They halted buy on stocks(no margin) on Interactive Brokers which powers most of the retail apps in Europe. I think the other brokers did the same. If you listen to this guy it's pretty clear he'a protecting the hedge funds. "If our customers loose money we have to put ours" https://m.youtube.com/watch?v=7RH4XKP55fM https://m.youtube.com/watch?v=7RH4XKP55fM
- rusticpenn 6y ago
  Looks more like he is trying to protect his company. ( If the Hedge fund or clearance house fails, the broker would loose a lot of money).
  - thefounder 6y ago
    Yeah, better let the retailers loose..not market manipulation, just driving the stock to the right price where both the broker and the hedge wins. I wouldn't call this a free market.
    - 6y ago

deleted 6y ago

[deleted]