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Glad I got out while only taking a slight beating, I was worried they were gonna crack down but I didn't expect them to go all out like it did. Feels like they got everyone EXCEPT Gamestop lol
When you buy or sell a stock the broker uses a clearinghouse to settle the transaction. There is one that controls all to ensure we know who owns what. Stocks settle at T+2. The clearinghouse expects that the buyer will pay the sale price at T+2 and seller expects to receive it then.
In case the buyer goes insolvent and can't fulfill its obligation brokers must post collateral (incredibly arcane calculation heavily dependent on volatility) as a deposit. This amount was updated post-Dodd Frank to be higher to ensure there are no failures requiring unwinding.
This collateral can only be from the brokers own equity account. Cannot use client money. In normal times this isn't an issue and its deminimis. Because of the government mandated calculation highly volatile stocks require significantly more collateral and it can grow exponentially. Thus liquidity crisis.
Essentially, SEC regulations post 2008 were setup to make sure all the brokers posted enough collateral and had skin in the game to ensure trades were made and no required unwinding on a broker failure. These regulations were never designed for this type of volatility in a stock. The total collateral that had to be posted by brokers went up by a couple billion this week tied to the few stocks named.
See my next post below.
Get a proper account like with Fidelity or TDAmeritrade. Although the latter has put some restrictions too, they've been mostly ok with me
RH isn't using Apex. They are their own clearinghouse. IT was the DTCC that got them.
You're right, I'm not sure of the exact nature of their current relationship because it's not publicly disclosed anymore. Apex Clearing is the backbone for pretty much all of these new age trading platforms, so that's speculation on my part, my bad.
For clarification for others, clearing firms (e.g. Robinhood acting as their own clearinghouse) still have obligations to DTCC. Almost all US equities are settled by DTCC two days after the transaction takes place. Brokers need to put up money / collateral with the DTCC to back those trades during the two days, which creates cash crunches on volatile days.
In other words, if you're going to trade in pumped up meme stocks, do it through a traditional broker since they're likely to have the equity to cover that volatility.
sounds like a coverup for yesterday, for the 10 clients they'll have left after all this is said and done
Forget it, the volume of people who can trade by themselves at any moment has increased by an amount disproportionate to server capacity. I couldn't even log in to RBC Investment for an hour two days ago and I wasn't even trying to trade. The volume wasn't even high, it was just high relative to your average day.
A real market correction over a day or a few days would likely cause servers to go down randomly and brokerage firms setting priorities based on portfolio size.
Mark this prediction: the next bailout won't be done by the government. It will be brokerage firms force selling their retail investors' positions to protect their biggest clients. We saw this this week and regulators and lawmakers are confused, not caring, or sleeping at the switch.
Warren's comment today was basically "People are buying highly volatile stocks without understanding what they're getting into! I will take action to prevent that!"
Good luck with that kind of help.
This sounds like a guaranteed way to set a good chunk of the country on fire... You do that shit and you are gonna have more problems than "storming the capitol". People would lose their shit, and rightfully so.
I literally just started into stock trading and using Robinhood about 2 weeks ago.
I fell asleep on the AMC stock that I meant to buy 2 weeks ago because I knew they would be coming back this Summer in some way.
with all the BS they are doing now, what is the better alternative app(s) people use?
and how easy is it to transfer my stocks and remaining funds off of Robinhood
I fell asleep on the AMC stock that I meant to buy 2 weeks ago because I knew they would be coming back this Summer in some way.
with all the BS they are doing now, what is the better alternative app(s) people use?
and how easy is it to transfer my stocks and remaining funds off of Robinhood
Stock seller please! I am squeezing hedge funds and I need your strongest shares!My shares are too volatile for you, amateur
Try Fidelity. There are others like Webull and TD Ameritrade.
That huge company behind the hedge fund pays for all their trades to get users data to use to calculate trends. Fuck robinhood forever.
It took a few days to cash out to my bank account. I suggest everyone else do the same.
..all 500 bucks .. but still.... It's the principle.
Also. This is the one time I wish everyone with bots and shit would out them to use.
My shares would bankrupt you, amateur! You can not handle my shares! You'd better go to a broker that deals in less volatile stocks!
It would be peak 2021 if Robinhood had to restrict trading their own stock on their own platform
Someone studied at Prager U.
