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Isn't that what Robinhood was also saying?

by Hamuko 6y ago

jstanley 6y ago
Yes.
belval 6y ago
After a while yes, what caused the initial issue was their initial press release that made no mention of not having enough money to cover transactions for GME/AMC. They said it was to "protect their users", which is what triggered the widespread outrage.
anonu 6y ago
RH does their own custody & clearing, so the DTCC was telling them directly what type of collateral they needed to post. Companies like Revolut outsource this function to DriveWealth, which coincidentally are the backend for many trading-focused fintechs. So there is 1 level of indirection. On the other hand - not too clear why everyone is claiming some massive conspiracy. There are rules around liquidity and collateral and they are directly tied to volatility of a stock.
- Jommi 6y ago
  I thought they used apexclearing
  - anonu 6y ago
    https://robinhood.com/us/en/support/articles/whats-clearing-by-robinhood/ https://robinhood.com/us/en/support/articles/whats-clearing-... They are self-clearing.
at-fates-hands 6y ago
Nope. They were pretty vague about why they did it: "We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only." The statement, which was posted on Robinhood's websiteand sent via email to its millions of users, also went on to say, "Amid significant market volatility, it's important as ever that we help customers stay informed." https://www.fool.com/the-ascent/buying-stocks/articles/why-did-robinhood-shut-down-gamestop-trading/ https://www.fool.com/the-ascent/buying-stocks/articles/why-d... A lot of people in finance said they should have said they didn't have the capital to cover these positions instead of what they did say. I'm pretty sure they would've faced the same rage mob regardless of what they said - it was what they did that got people so fired up. Here's the full statement from their site: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-through-market-volatility https://blog.robinhood.com/news/2021/1/28/keeping-customers-...

Isn't that what Robinhood was also saying?

by Hamuko 6y ago

Isn't that what Robinhood was also saying?

jstanley 6y ago

Yes.

belval 6y ago

After a while yes, what caused the initial issue was their initial press release that made no mention of not having enough money to cover transactions for GME/AMC. They said it was to "protect their users", which is what triggered the widespread outrage.

anonu 6y ago

RH does their own custody & clearing, so the DTCC was telling them directly what type of collateral they needed to post. Companies like Revolut outsource this function to DriveWealth, which coincidentally are the backend for many trading-focused fintechs. So there is 1 level of indirection. On the other hand - not too clear why everyone is claiming some massive conspiracy. There are rules around liquidity and collateral and they are directly tied to volatility of a stock.

Jommi 6y ago
I thought they used apexclearing
- anonu 6y ago
  https://robinhood.com/us/en/support/articles/whats-clearing-by-robinhood/ https://robinhood.com/us/en/support/articles/whats-clearing-... They are self-clearing.

at-fates-hands 6y ago

Nope. They were pretty vague about why they did it: "We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only." The statement, which was posted on Robinhood's websiteand sent via email to its millions of users, also went on to say, "Amid significant market volatility, it's important as ever that we help customers stay informed." https://www.fool.com/the-ascent/buying-stocks/articles/why-did-robinhood-shut-down-gamestop-trading/ https://www.fool.com/the-ascent/buying-stocks/articles/why-d... A lot of people in finance said they should have said they didn't have the capital to cover these positions instead of what they did say. I'm pretty sure they would've faced the same rage mob regardless of what they said - it was what they did that got people so fired up. Here's the full statement from their site: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-through-market-volatility https://blog.robinhood.com/news/2021/1/28/keeping-customers-...