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Increased capital requirements at the DTCC (which I believe you are referring to) were the result of an equation - not due to some discretionary decision.
by jcfrei 6y ago
Increased capital requirements at the DTCC (which I believe you are referring to) were the result of an equation - not due to some discretionary decision.
- AzzieElbab 6y agowould you be able to elaborate?
- jcfrei 6y agoHere's a good explanation by Matt Levine: https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop?sref=1kJVNqnU https://www.bloomberg.com/opinion/articles/2021-01-29/reddit... under "Why did Robinhood stop them?"
- AzzieElbab 6y agoCool. Thanks
- moenzuel 6y agoYes, why isn’t the DTCC testifying? How does their algorithm set the collateral price? How does a phone call get the collateral price reduced by a billion dollars? Overall it seems that DTCC is a major shadow player that most people never knew about. Overall I think this entire situation is a combination of sketchy abuse of special power (naked short selling and failure to deliver with little/no consequence) and unforeseen side effects (DTCC able to make entire funds, brokers, and exchanges instantly insolvent over night) leading to the Everyman feeling like they have been cheated by the incumbents. I don’t know the correct path forward but I’ve certainly learned more than I’d expected about order flow.
- jcfrei 6y agoIn an interview yesterday on CNBC the chairman (and founder) of Interactive Brokers (very large brokerage firm) made a suggestion: Outstanding short interest should be reported daily (rather than monthly as of right now) and margin requirements should increase by 1 percentage point for every percentage point increase of the outstanding short interest.