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Robinhood reports outage as markets rebound

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Re: Robinhood reports outage as markets rebound

#81

Post by manigandham »

nostromo wrote: post #16

Reading Reddit's WallStreetBets has been unintentionally hilarious. https://www.reddit.com/r/wallstreetbets/ Folks were leveraging up all last week and buying puts, thinking the market was tanking to zero and we're all going to die of "beer virus" as they call it -- and are getting a harsh lesson about timing the market today. They’ve been giving so much leverage to broke young people, I wouldn’t even be surprised to…

It's probably one of the most suspenseful market opens in history. The tug of war between bulls and bears across the entire sub has been incredibly entertaining.

Regarding leverage: buying options is a fixed loss against the cash in your account. RH also only allows selling secured options. There's no way to lose more than you started with (at least with the current app, they had problems before).

Retail investors using standard accounts can't buy options on margin, it's only used for faster settlement.

Re: Robinhood reports outage as markets rebound

#82

Post by bostonfincs »

ithinkinstereo wrote: post #31
ab_io wrote: post #23

This is starting to look like a customer extinction level incident — Any idea which competing service their users / wsb will likely move to?

webull and thinkorswim will probably be the two biggest beneficiaries today.

I see think or swim and TD/Fidelity being biggest beneficiaries webull seems like more of the same.

Re: Robinhood reports outage as markets rebound

#83

Post by manigandham »

intuitionist wrote: post #27
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.

The business model is perfectly sustainable and the same as all the other brokers. Commissions were purely extra income.

The problem is that Robinhood is a young tech company and the "move fast and break things" approach doesn't work when it comes to industries that need reliability and risk management.

I'm surprised they got away unscathed from the lack of proper margin calculations before. That should've led to major fines.

Re: Robinhood reports outage as markets rebound

#84

Post by kaffeemitsahne »

daenz wrote: post #43

What are the odds that this was a cyberterrorism attack? If you can predict this kind of market event (the bounce back), and you want to hurt a company and its users, you would simply DDoS at the right time.

If you can predict this kind of market event I imagine you've got better things to do.

Re: Robinhood reports outage as markets rebound

#85

Post by turc1656 »

ra7 wrote: post #56
Willson50 wrote: post #53

Earlier quoted context omitted.

The SEC does.

Pardon my ignorance, but what are SEC rules for things like this? Do they expect some reasonable availability for trading platforms or do they consider massive outages like this "negligence"?

My limited understanding is that if you have a license to be a broker in this nature, you have to meet certain requirements. Similar to getting a bank charter - banks have to be open all standard business days during certain hours. Things may happen from time to time that are unexpected - like a massive snow storm that closes the bank for the day or at least part of the day.

I imagine the rules are similar - you must be able to have your clients trade during normal market hours. The regulators understand there can be unexpected events that put systems down unexpectedly (high volume, bug that crashes the system, etc.) and are generally pretty understanding. But I think something like this where they are down the whole day (and STILL down from the looks of their status page, though they claim to have identified the issue), could easily earn them a fine from the regulators for not meeting the license/charter requirements.

Re: Robinhood reports outage as markets rebound

#87

Post by ethbro »

nostromo wrote: post #70
danhak wrote: post #61

Earlier quoted context omitted.

There’s nothing unintentional about the hilarity. That community is totally self-aware and rife with in-jokes and satire. The folks that post there see their gambling for what it is.

I think there's a mix of in-on-the-joke and not. I've read some sad stories about, for example, a student betting student loan money in the market and losing it instantly, lured to make risky bets from the other stories of dumb luck success. Here's someone I don't think is in on the joke: https://i.redd.it/at7gloeb5ck41.jpg ... oops

hmm, i wondeR if reddiT Has somE Depressing histOry of coNfusing sAtiricaL content with the real worlD.

Re: Robinhood reports outage as markets rebound

#88

Post by intuitionist »

manigandham wrote: post #83
intuitionist wrote: post #27

Earlier quoted context omitted.

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.

The business model is perfectly sustainable and the same as all the other brokers. Commissions were purely extra income. The problem is that Robinhood is a young tech company and the "move fast and break things" approach doesn't work when it comes to industries that need reliability and risk management. I'm surprised they got away unscathed from the lack of proper margin calculations before. That should've led to maj…

Ah, sure, this is what I meant by it not being sustainable. They keep fucking up in standard SV ways, eventually FINRA or maybe even the SEC will come down hard. The basic brokerage business seems fine.

Re: Robinhood reports outage as markets rebound

#89

Post by beezle »

I don't understand the attraction of Robinhood over the likes of TD or Etrade. TD minimum balance is $50 (the minimum transfer) and Etrade $500. Both are well vetted brokers with additional features and services.

If you are investing, how sexy the app is (if you only use a phone) shouldn't matter. If you are day trading from a phone app (except in emergency), you are, IMHO, delusional.

Re: Robinhood reports outage as markets rebound

#90

Post by usaar333 »

beezle wrote: post #89

I don't understand the attraction of Robinhood over the likes of TD or Etrade. TD minimum balance is $50 (the minimum transfer) and Etrade $500. Both are well vetted brokers with additional features and services. If you are investing, how sexy the app is (if you only use a phone) shouldn't matter. If you are day trading from a phone app (except in emergency), you are, IMHO, delusional.

Most people who believe they can profit day trading are delusional to begin with.

If you are just doing it to gamble (for fun), a sexy app that lets you gamble easier on the fly better can well be worth it.

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