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GME was having 400% swings in a day, and being bought in a large part by brand new retail investors who had just opened accounts. That’s a perfect storm for no
by valuearb 6y ago
GME was having 400% swings in a day, and being bought in a large part by brand new retail investors who had just opened accounts.
That’s a perfect storm for nonpayment issues.
- blablabla123 6y ago> GME was having 400% swings in a day Well, if that's what people want. At that point in time it's about buying, not selling. > and being bought in a large part by brand new retail > investors who had just opened accounts. > That’s a perfect storm for nonpayment issues. Ok but they need to go through some sort of payment processing that checks the credit rating. Even if the credit card is close to the limit, we are probably talking about amounts smaller than 1000 $. Anyone able to visit the Reddit homepage and installing the Robinhood app should have that amount of cash in hardware. FWIW, normal eCommerce payment processors deal with nonpayment issues in the sub percent range.
- valuearb 6y agoTo be more clear DTCC gets its collateral from the broker, ie Robinhood, not the actual clients. And the broker is not allowed to use client funds for collateral. So the DTCC has to worry about Robinhood, and Robinhood has to worry about their clients.