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Robinhood reports outage as markets rebound

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Re: Robinhood reports outage as markets rebound

#21

Post by EpicEng »

SpicyLemonZest wrote: post #18
glouwbug wrote: post #7

Guess they weren't ready for the massive amounts of requests coming from a world record market correction / recession. That, or they released a bunch of new features over the weekend. Why we are building highly sensitive monetary performance based applications under the guise of agile and electron is beyond me. The app market needs a market correction in design. IEEE, military, aerospace, or aviation design standardi…

If Robinhood wants to target their app towards people who want a fluid interface and neat graphs, compromising on the always-up needs of day traders, I don't see why that's wrong.

It's a trading app that is... down for an entire day of trading. That seems like the wrong sort of compromise to make. The number one priority of anyone who is actively trading is... to be able to trade.

Not even mentioning the other hilarious bugs this company has let out into the wild. They don't seem to have a good grasp on what they're doing, and now many other, more mature brokerages offer zero fee trades. Their time is coming.

Re: Robinhood reports outage as markets rebound

#24

Post by champagnepapi »

I was getting ready to buy a bunch of calls this morning via Robinhood. I hit the "submit" button on the trade, and nothing happened. VERY disappointing experience. When it comes to applications like this, downtime is critical. Haven't been able to place a trade all day.

Re: Robinhood reports outage as markets rebound

#25

Post by gmm1990 »

Animats wrote: post #15

At Robinhood, you're not the customer. You're the product.[1] Robinhood makes their money by selling order flow to high-frequency traders. Robinhood doesn't charge commissions, but the price is slightly worse. [1] https://seekingalpha.com/article/4212397-robinhood-high-freq...

How do you think most brokerages fill orders? I'd rather get filled at the best price possible, which I assume a high frequency firm would be able to do better than some other filling method. Pretty sure most brokerages do this anyway.

Re: Robinhood reports outage as markets rebound

#26

Post by inferiorhuman »

sjc33 wrote: post #6

I just got an email from Robinhood support on the outage, half an hour before markets close. I don't actively use RH as my main brokerage so not a big deal to me, but obviously this is unacceptable. Don't recall any other online brokerage suffering an outage like this. Suffice to say this throws cold water on any mystic around Robinhood having better tech that any incumbent.

Don't recall any other online brokerage suffering an outage like this.

Brokerage firms have outages with surprising regularity. I remember Sharebuilder being particularly bad, but Vanguard was down for a bit last week. A whole day though is pretty spectacular.

Re: Robinhood reports outage as markets rebound

#27

Post by intuitionist »

elwell wrote: post #12

Being down for an entire trading day is pretty crazy. I can't imagine what's going over there today in the engineering & devops teams. Depending on where the issue is, there might be thousands+ of orders to reconcile (manually?). It will be really interesting to read a post-mortem engineering blog post if they make one.

They don’t seem like serious enough professionals to release a postmortem. Did they do so for the “infinite leverage” bug?

I have a couple grand in play money in Robinhood, because hey, zero commissions, but it’s clearly not sustainable for the long term. I’m glad my real investments are all safely parked at Vanguard, where I likely wouldn’t even notice if the brokerage seized up for a day.

Re: Robinhood reports outage as markets rebound

#28

Post by gmm1990 »

gmm1990 wrote: post #25
Animats wrote: post #15

At Robinhood, you're not the customer. You're the product.[1] Robinhood makes their money by selling order flow to high-frequency traders. Robinhood doesn't charge commissions, but the price is slightly worse. [1] https://seekingalpha.com/article/4212397-robinhood-high-freq...

How do you think most brokerages fill orders? I'd rather get filled at the best price possible, which I assume a high frequency firm would be able to do better than some other filling method. Pretty sure most brokerages do this anyway.

Sorry thinking about this more, I guess the actual best price at the stock exchanges would be preferable

Re: Robinhood reports outage as markets rebound

#29

Post by tptacek »

Animats wrote: post #15

At Robinhood, you're not the customer. You're the product.[1] Robinhood makes their money by selling order flow to high-frequency traders. Robinhood doesn't charge commissions, but the price is slightly worse. [1] https://seekingalpha.com/article/4212397-robinhood-high-freq...

This is... not a good analysis. It's directionally correct but not for the reason you say it is.

Virtually all brokers are rebated for routing orders to HFTs. HFTs dominate retail order execution. HFTs pay brokerages for access to their order flow, because that order flow is uninformed and safe to quote narrow spreads for.

Like other brokerages, Robinhood makes money on net interest from cash holdings and stock lending fees (it helps that Robinhood encourages people to buy meme stocks with a lot of short interest). Unlike other brokerages, Robinhood also encourages options trading, which are more lucrative for market makers.

You sort of are the product at Robinhood, but it's not really because Robinhood is doing bog standard order routing that every other broker does too.

Re: Robinhood reports outage as markets rebound

#30

Post by junar »

Animats wrote: post #15

At Robinhood, you're not the customer. You're the product.[1] Robinhood makes their money by selling order flow to high-frequency traders. Robinhood doesn't charge commissions, but the price is slightly worse. [1] https://seekingalpha.com/article/4212397-robinhood-high-freq...

No, that's incredibly misleading.

> Headlines like Robinhood Gets Almost Half Its Revenue in Controversial Bargain With High-Speed Traders are virtually meaningless, as the above discussion of other monetization options should make clear. At scale, once their userbase actually has material cash in their accounts on any given day, they’ll likely make net interest, but pre-scale they may not even have the treasury function to do the work required to earn it safely. It’s a commentary on how low their revenue is (growth-stage startup optimizing for reach over revenue, film at 11), not a commentary on how beholden they are to Wall Street.

https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...

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