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Maybe they have issues with people taking on a margin that they cannot afford? Cryptocurrencies being as volatile as they are shorting them on a margin can resu
by niceairport 5y ago
Maybe they have issues with people taking on a margin that they cannot afford? Cryptocurrencies being as volatile as they are shorting them on a margin can result in high losses that HSBC prefers not to be involved with? Just a guess.
- ptero 5y agoNot impossible, but IMO highly unlikely: stocks, especially smaller ones can be way more volatile than any currency with over 1T market value. And you can still buy those on margin.
- niceairport 5y agoThat's true. Maybe something to do with regulations then? HSBC is already being accused of being involved with money laundering quite a lot. Also, what other coins except BTC have market cap >1T?
- ptero 5y agoI suspect regulation (or fear of impending one) is the likely culprit; but again, not sure. Re: size -- I was including regular fiat currencies, not just digitals.
- perl4ever 5y ago>you can still buy those on margin That is absolutely not the case in a categorical sense. Brokers can and do apply different margin requirements on a stock by stock or customer by customer basis. There's nothing out of the ordinary about a security not being marginable or having increased requirements due to risk assessment. For example, here is a list of stocks at one broker with particular margin requirements, and it says it "changes frequently": https://invest.ameritrade.com/cgi-bin/apps/u/MarginReq https://invest.ameritrade.com/cgi-bin/apps/u/MarginReq Given that there are hundreds starting with "A", I'd assume the entire list is in the thousands, of securities that have individual margin requirements. I think in fact the ticker GBTC which is a trust that owns Bitcoin isn't marginable.
- codetrotter 5y agoNote, the page you linked to requires login.
- perl4ever 5y agoWell, here is a public page (with just GME) that proves the point that they can and do apply requirements to individual stocks, anyway: https://www.tdameritrade.com/td-ameritrade-trading-restrictions-stocks.page https://www.tdameritrade.com/td-ameritrade-trading-restricti... Here's another with GME and AMC: https://www.schwab.com/margin-updates https://www.schwab.com/margin-updates But there are also lots of others you never heard of, that aren't mentioned.
- klodolph 5y agoDoesn't the market volume have a multiplicative effect, though? In other words, it's not just volatility, it's volatility x volume. Or something like that.
- gruez 5y agoI'm pretty sure bitcoin has less volatility than some of the meme stocks (eg. GME or AMC).