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The formula for reserve requirements includes volatility as a variable. Before the meme stock frenzy, GME only required <5% of cash collateral before settlement
by WoahNoun 4y ago
The formula for reserve requirements includes volatility as a variable. Before the meme stock frenzy, GME only required <5% of cash collateral before settlement. When volatility surged, this went to close to 100% cash collateral. RH didn't have enough cash.