191–200 of 316 posts
Commenters saying that this is understandable and simply how margin trading works might be missing this part of the story: https://blog.robinhood.com/news/2021/1/28/keeping-customers-... > We also raised margin requirements for certain securities. Is that how margin trading always works? The broker can just without prior notification increase your collateral requirement and liquidate you instantly?
Yeah, brokerages will do that if the stock takes a big drop like it did today. Oh, did you not read that part of your margin agreement? According to thread, some are just now getting to that part. Those same folks shouldn't have been trading GME on margin. If it's any consolation, I've had Fidelity, IB, et. al., do the exact same thing when a trade turned sour. Difference is, I didn't run to Reddit to display my igno…
I honestly didn't read the agreements on Robinhood. Before you call me stupid or irresponsible, I'm going to say practically no one reads these agreements, and even fewer understand them. The NYT a few days ago had an opinion piece on how no one reads the TOS for things like this. A very choice line: > A 2012 Carnegie Mellon study found that the average American would have to devote 76 work days just to read over tec…
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I think the Bitcoin example was exactly what the investors were thinking. A stock that magically always goes up and everybody gets rich. With a real stock, somebody has to be left holding the bag at the end. (Probably with BitCoin as well, but that's a separate discussion.) My understanding was that, with the short squeeze, for a certain number of those stocks the buyer would be the hedge funds. But it seems like at…
I mean, that's exactly what's been happening with Tesla for months.
we placed it to mitigate the risk on your account Wow, that's pretty awful since liquidating the position may actually put the user at a net loss, which wouldn't avoid risk: It would actually "instantiate" the potential risk of having to sell the stock after falling below the purchase price. Why not give users the opportunity to provide more collateral for their margin?
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Who's that? It's been headline news for at least three days.
Trump still has millions of supporters after years of negative headlines. Idk who is still going to use RH but I know they exist.
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Yep. I’ll repeat what I said in another thread: It’s really kind of ironic. People are knee-jerk blaming RH for closing margin positions because they didn’t fully understand how they work and the risks involved. Simultaneously, the same people are blaming RH for stepping in the way of what very certainly would have turned into a bad trade for a lot of people. I don’t take RH’s side but it’s hard to see a winning play…
Nonsense. People are allowed to make bad trades every second of every day without protection from the platform; but now they develop a conscience and save people from themselves? If this is true, RH and other platforms pulling smiliar stunts should be sued out of existence. Might not be a bad idea to significantly increase taxation on derivatives trading too.
No, RH is saving their own asses from the poor financial decisions of their clients. They don't want to be on the hook when those accounts crater along with GME.
If this is true, RH and other platforms pulling smiliar stunts should be sued out of existence.
Take it up with the SEC. Oh, wait, the SEC is at least partially responsible for such rules being in place. It's a conspiracy, I tell ya!
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A margin call on a stock you halted trading in smells like fraud. It’s like the bank banning selling your home then repossessing it when the value falls. Crooked entirely.
> It’s like the bank banning selling your home then repossessing it when the value falls. Apples and oranges. If you bought a house on margin, the way a brokerage defines margin, they would absolutely be allowed to do that. Margin and mortgage are fundamentally different types of loans. I agree that halting buys was absolutely wrong. Definitely see where you're coming from, if you look at the two actions together..it…
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The difference here is they prevented people from starting new positions while still allowing closing them .. effectivly being the cause of the drop.
You think a lack of volume from retail traders on Robinhood is the cause of the drop? To put it mildly, that's a little naive.
You think that the presence of volume from retail traders of Robinhood wasn't the cause of the increase to begin with? To put it mildly, that's delusional.
He was margin called. This is literally how margin works, has nothing to do with GME or the Robinhood furor.
Commenters saying that this is understandable and simply how margin trading works might be missing this part of the story: https://blog.robinhood.com/news/2021/1/28/keeping-customers-... > We also raised margin requirements for certain securities. Is that how margin trading always works? The broker can just without prior notification increase your collateral requirement and liquidate you instantly?
Of course, you're literally borrowing money from them to buy securities.