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So here's the thing: there's plausible deniability at play here. RH isn't the only brokerage to suspend/limit trading in volatile stocks. The reason given (l
by joncrane 6y ago
So here's the thing: there's plausible deniability at play here. RH isn't the only brokerage to suspend/limit trading in volatile stocks.
The reason given (liquidity issues for the broker and clearinghouse) is entirely plausible.
While it's possible, it's (I believe) very difficult to prove that that's what happened, and frankly, there's a more obvious answer. Hanlon's razor applies here.
- deleted 6y ago[deleted]
- deleted 6y ago[deleted]
- ouid 6y agoDo you mean Ockham's razor? Hanlon's razor is completely incompatible with the efficient market hypothesis, and really just finance in general.
- joncrane 6y agoHanlon's razor is "Never ascribe to malice that which is sufficiently explained by incompetence." The "incompetence" explanation is that RH is a baby newcomer as far as retail brokerages go and made a desperate move to placate NSCC and save their butts. They got in over their heads and cast about to figure out how to make it through this week. The "malice" explanation would be a sinister cabal led by Citadel (RH's MM who pays them for order flow) pulled strings via a back room threat to make RH suspend buying of GME. The