The one thing I have to give Robinhood credit for is the good marketing that appealed to Zoomers and the WSB crowd. But, much like Crytpo Andys, a lot of these

The one thing I have to give Robinhood credit for is the good marketing that appealed to Zoomers and the WSB crowd. But, much like Crytpo Andys, a lot of these people just don't understand how anything works. Take the GME short squeeze, which a lot of people still fundamentally misunderstand. RH allowed (allows?) you to sign up, promise to deposit funds and trade on credit, essentially, until those funds arrive (typically in no less than 3 days). That settlement process dind't go away. RH just abosrbed the risk. That's fine when the market is normal. Some people might buy GE and others might sell GE so it all evens out. By this I mean the default risk to RH is mitigated (but still real). The problem with GME is everyone was buying in a short space of time to the point RH had to borrow billions to cover the collateral requirements to the point it was risking making the company insolvent. That's how extreme it was. So what happens if people sign up, buy GME on credit and then GME crashes? RH is left holding the bag. That was the problem. It's also why GME blocked further purchases bu tallowed sales because sales decreased their overall risk no matter where they came from. But no, how things actually work is ignored in favor of the system protecting hedge funds. Personally I don't use any free brokerage because of the order flow issue, which is to say that all your orders are sold to hedge funds and that's where RH makes it's money. Just like with free online services that sell advertising: you are the product. It's so wild to me that people bitch about the evils of advertising but accept without question the selling of order flow, which is directtly taking money from your pockets. Crazy. It's even crazier when you consider that the aforementioned evil hedge funds supposedly protecting GME short sellers are directly funding and benefitting from RH order flow but they get no flak for that. You can only get away from not knowing how the underlying thing works. It'll eventually come back to bite you in the ass.