oysterberry

3 ms·

1. 1.▲
   by oysterberry 6y ago

   Can you explain why the collateral required is higher (if no one has any insolvency issues)? If you watch the video I posted in the parent comment with the webull ceo, he states the exact scenario where brokers have no problem margin callin
2. 2.▲
   by oysterberry 6y ago

   A more succinct explanation: Hedge fund has huge unrealized loss that may bankrupt them if they try to buy the shares that they shorted back. Their broker realizes too late, and if they margin call them now, the hedge fund might not have en
3. 3.▲
   by oysterberry 6y ago

   Yes this is true, and sometimes they don't even need to collect because they can write off the small loss (this is explained in the video from the webull ceo). But the lenient margin requirements let them hang themselves when they can&
4. 4.▲
   by oysterberry 6y ago

   It is not a conspiracy but the system is broken. Everyone seems to be missing the point of WHY collateral requirements have gone up. It is not because of volatility of the price movement, but volatility of whether the trade will clear. The