51–60 of 137 posts
I don't understand how they can blame capital requirements and potentially having to cover customers' losses (that was Interactive Brokers) for stopping purchases of the stock. Unless you're talking about buying on margin, there's no risk that you'd have to absorb any loss for someone who just buys a share of the stock through you with their own cash.
If it was decided that most people could only sell stock, not buy it - who exactly is buying the stock?
I don't understand how they can blame capital requirements and potentially having to cover customers' losses (that was Interactive Brokers) for stopping purchases of the stock. Unless you're talking about buying on margin, there's no risk that you'd have to absorb any loss for someone who just buys a share of the stock through you with their own cash.
>Unless you're talking about buying on margin I can assure you, there was a lot of margin purchases happening.
I don't understand how they can blame capital requirements and potentially having to cover customers' losses (that was Interactive Brokers) for stopping purchases of the stock. Unless you're talking about buying on margin, there's no risk that you'd have to absorb any loss for someone who just buys a share of the stock through you with their own cash.
>Unless you're talking about buying on margin I can assure you, there was a lot of margin purchases happening.
Earlier quoted context omitted.
>Unless you're talking about buying on margin I can assure you, there was a lot of margin purchases happening.
Then why not do what TD did and restrict buying on margin? Why tell everyone on your platform that a "stock isn't supported"?
I'm from EU and was looking into investing earlier into Nasdaq symbols, iow before my bank decides to bother letting me pick some crumbs from their plate.
So I look around and I figure that what you can do on these online trading platform is to buy some glass-beads from them that happen to correspond to IRL stocks. IOW, these folks are data-mining user sentiment to place orders while offloading risk.
Isn't it the same with RH? Aren't they just saying "you can play along, just not with these beads. Too risky for us." Or is RH a straightforward stock broker?
If it was decided that most people could only sell stock, not buy it - who exactly is buying the stock?
It was blocked in Robinhood's UI, but on the back end the hedge funds could trade at will. And the hedge funds had to buy a lot of stock to cover their shorts, so it was handy to get the retail buyers out of the way.
People invest due to variety of reasons. Speculation, undervalue, overvalued, etc. This does not seem like an open market if people cannot buy and sell at their own risk.
Sudden changes to what is allowed in the market could also cause some unknown shift to how it works. If things are let to be, at least, at some time, things will settle down ... whether that takes a few days, weeks, years, decades. I think that is how the market works. There appears to be added controlling factors into the market.
I would rather be with a brokerage where I can make my own decisions. Not one that suddenly controls what can and cannot be done.
TD & Robinhood restricts certain trades: https://www.cnet.com/personal-finance/robinhood-app-td-ameri...
This was an awful PR response. I actually buy the reasoning behind it - but putting out a corporate speak like this instead of trying to emotionally relate to upset users? Smh
"We are deeply grateful to our users" is about to get memed to the moon.
I don't understand how they can blame capital requirements and potentially having to cover customers' losses (that was Interactive Brokers) for stopping purchases of the stock. Unless you're talking about buying on margin, there's no risk that you'd have to absorb any loss for someone who just buys a share of the stock through you with their own cash.
The thing is, clearing houses expect collateral up front.
It's not a risk issue between Robinhood and its clients, its a risk issue between the clearing house and Robinhood.
I'm not saying that this what actually happened, I'm just saying that the presented argument has plausible elements.