Transfer Stocks Out of Your Robinhood Account • Hacker News Board

Re: Transfer Stocks Out of Your Robinhood Account

#221

Post by kelnos » Fri, Jan 29, 2021, 5:29 AM UTC

ditonal wrote: post #13

The RH apologists are going on long winded explanations about clearing houses (and to some extent there’s elements of “it’s too complex for your little brain”). But even to the extent it’s true, if I put in 5k from my checkings into RH and buy stock, why does Rh need all this liquidity to get orders filled? I understand turning margin accounts off, but that’s it . Past that, at best robinhoods business model is highl…

Yup. If I had my holdings at a brokerage that suddenly decided to restrict trading that was previously allowed, without some sort of law change or lawful order from the SEC (presumably something that would apply to all brokerages), I would immediately transfer all my assets out. Doesn't even matter if their restriction didn't affect me at the time. I would not want to give my business to a company that would do that.

Re: Transfer Stocks Out of Your Robinhood Account

#222

Post by edgyquant » Fri, Jan 29, 2021, 5:29 AM UTC

spamizbad wrote: post #217

PragmaticPulp wrote: post #122

Earlier quoted context omitted.

One of Robinhood’s innovations was that they gave everyone a margin account, but hid the details. When you transfer money in, Robinhood doesn’t actually get that money until a couple days later. They allow you to buy stock immediately, but that happens (transparently) on margin. Robinhood is loaning you the money to make it happen. Likewise, when you buy or sell a stock, the trade doesn’t settle for t+2 days. Robinho…

So then how is HFT a thing then? Wouldn't millions of yet-to-be-cleared trades over a few days require them to hold a massive amount of collateral?

The firms engaging in HFT have that collateral, and are usually hooked directly into multiple exchanges.

Re: Transfer Stocks Out of Your Robinhood Account

#223

Post by [deleted] » Fri, Jan 29, 2021, 5:29 AM UTC

drewcon wrote: post #167

ditonal wrote: post #13

The RH apologists are going on long winded explanations about clearing houses (and to some extent there’s elements of “it’s too complex for your little brain”). But even to the extent it’s true, if I put in 5k from my checkings into RH and buy stock, why does Rh need all this liquidity to get orders filled? I understand turning margin accounts off, but that’s it . Past that, at best robinhoods business model is highl…

Sigh. In a different life, I worked for a well known discount brokerage in 2005 processing corporate actions. Mergers, splits, divided payments, proxy voting, exercising bond contract provisions, warrants, short covering etc.for retail customers. Not glamorous work to be sure. I can tell you unequivocally that to deliver the simplicity, affordability, and transaction efficiency we now take for granted, many MANY laye…

[deleted]

Re: Transfer Stocks Out of Your Robinhood Account

#224

Post by cyberpsybin » Fri, Jan 29, 2021, 5:30 AM UTC

Citadel > Melvin Capital

Citadel > Robinhood

Re: Transfer Stocks Out of Your Robinhood Account

#225

Post by fountainofage » Fri, Jan 29, 2021, 5:32 AM UTC

calmworm wrote: post #90

OiNG wrote: post #21

there is a lot of misinformation out there about what happened today. its starting to to look like this all happened due to default concerns and the resulting changes in necessary collateral. I have no skin in this game (neither GME or Robinhood), but lets try to stay informed and not grab pitchforks based on non proven allegations.

Your speculation and saying “a lot of misinformation out there” doesn’t help. Allowing traders to only sell, and blocking buying is wrong. Who is allowed to buy at that point? Very few retail traders, but every major player who has an upside down stake still can. The price was then tamped down during the lock out so hedges and old money are able to minimize their loses. Anyone pretending this didn’t happen is delusio…

They will likely lose a lot of their users. The users were never the customers - not even the gold ones.

Re: Transfer Stocks Out of Your Robinhood Account

#226

Post by tomerico » Fri, Jan 29, 2021, 5:32 AM UTC

PragmaticPulp wrote: post #174

TuringNYC wrote: post #156

Earlier quoted context omitted.

>> When you transfer money in, Robinhood doesn’t actually get that money until a couple days later. They allow you to buy stock immediately, but that happens (transparently) on margin. The solution would be to disallow this feature, not to stop trading of certain tickets on all accounts, most of which are seasoned and funded

The cost of trading meme stocks also increased exponentially due to regulatory requirements. Full explanation with math here: https://twitter.com/kralctrebor/status/1354952686165225478?s... Also, it’s not realistic to expect them to completely retool their entire app and infrastructure in a matter of hours to disallow margin-based trades of only certain securities. If this was a long-term concern I’m sure they’d do e…

It's also hard to believe that their margin based algorithm doesn't have parameters that can be tuned easily. It's not the first time that a single stock has crazy volatility and speculation.

Re: Transfer Stocks Out of Your Robinhood Account

#227

Post by nprz » Fri, Jan 29, 2021, 5:32 AM UTC

ingend88 wrote: post #6

Will this be like #deleteUber where enough damage can be made by #deleteRobinhood ?

Robin hood is done. Potentially thousands and thousands of dollars could have been lost. Maybe it was a liquidity issue, who knows, but not even giving your customers some sort of warning that they would block purchasing? Completely unacceptable.

Re: Transfer Stocks Out of Your Robinhood Account

#228

Post by perl4ever » Fri, Jan 29, 2021, 5:33 AM UTC

JMTQp8lwXL wrote: post #163

fairity wrote: post #146

Why is Robinhood getting singled out when six brokerages implemented the exact same trade restrictions?

Likely because they were the first, and the rest caved in shortly thereafter (though in some cases, it was the clearing houses who stopped taking orders). In RH's case, it was RH's management itself that made the call, which makes them more accountable to the decision. They can't point to their clearing house and say, "don't blame us: it was the clearing house".

I don't think they were the first. I think TDA for example restricted people from buying GME the day before.

Re: Transfer Stocks Out of Your Robinhood Account

#229

Post by ROARosen » Fri, Jan 29, 2021, 5:34 AM UTC

ditonal wrote: post #13

The RH apologists are going on long winded explanations about clearing houses (and to some extent there’s elements of “it’s too complex for your little brain”). But even to the extent it’s true, if I put in 5k from my checkings into RH and buy stock, why does Rh need all this liquidity to get orders filled? I understand turning margin accounts off, but that’s it . Past that, at best robinhoods business model is highl…

I don't even really get all the anger directed just at Robinhood. Apex clearing, which clears for virtually every other new age trading platform (and back in the day RH) also halted these stocks.

I'm not sure of the biz aspect of this, but given the criticism RH historically got for pay-for-flow schemes (even while they were using Apex) I would assume it was RH which got the market-flow kickbacks - not Apex. So it's safe to assume that's how it still works today. Yet, Apex also halted orders for these tickers. This goes to show you the very real risk these types of retail clearing companies are facing in this market. So, I'm not absolving RH just saying they might have some real reason to have paused.

All this also shows you "there is nowhere to hide". There will always be somewhere somecompany which will put its perceived viability or PR before "sacrificing" for their loyal customers. Especially, given the fact that most of these platforms just one company for clearing anyhow.

Re: Transfer Stocks Out of Your Robinhood Account

#230

Post by thatguy0900 » Fri, Jan 29, 2021, 5:36 AM UTC

grecy wrote: post #188

PragmaticPulp wrote: post #170

Earlier quoted context omitted.

None of them have any gains until they press the sell button. The early buyers will probably sell a little bit to lock in profits. This drives the price down. They’ll then go on to social media and pump GameStop everywhere with memes and stories about taking down Wall Street. This brings in new money to pump the price back up. This is what they’re already doing: Pumping the stock to bring in new money, which they col…

Thanks, that's a great explanation of what I probably the most likely outcome. Humor me for a second - what happens the the (unlikely event) they ALL hold until it hits $10,000, and the "infinity squeeze" really does happen?

The hedge funds have to pay them, when they go out of business the brokerages are on the hook. Realistically the govt will bail them out or change the rules of the game.