I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Robinhood is facing nearly 50 lawsuits over GameStop frenzy
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Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#12Fuck robinhood I hope they are bankrupted. A company with zero integrity. I lost a huge amount of money that day. I don’t mind losing fair and square .... make a bad call, lose the dough, pay the price - that’s the deal. I’m even ok with losing for reasons I don’t understand due to the concealed rigged nature of the markets. But losing my money on the same day that robinhood manipulates the market openly and publicly…
For the record, why did Robinhood stop the trading? I know there's been an uproar, but due to the volume of articles it's been difficult to get a clearheaded idea of why Robinhood actually did it.
Liquidity issue. Or rather, extremely close to it.
The CEO said he "doesn't want to use the L word" to describe it.
Basically they had to cover/deposit the purchase trades themselves, before they ran out of money to do so (liquidity issue) they shut down purchasing - then went on record on CNBC etc claiming that it's not a liquidity issue.
Interview with the CEO https://youtu.be/LqoJApzkaPU?t=404 where he confirms that's the case
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#13Fuck robinhood I hope they are bankrupted. A company with zero integrity. I lost a huge amount of money that day. I don’t mind losing fair and square .... make a bad call, lose the dough, pay the price - that’s the deal. I’m even ok with losing for reasons I don’t understand due to the concealed rigged nature of the markets. But losing my money on the same day that robinhood manipulates the market openly and publicly…
Multiple brokerages shut down buying due to the collateral requirements that were raised. Robinhood seems like the fall guy here, hopefully people start asking the right questions about the collateral and the manipulation there.
other brokerages simply put up the money. this meant that while huge swaths of the retail investors in the US (and parts of Europe) were not allowed to buy GME, other retail investors had no issues.
to top it off, certain brokerages only allowed sell orders.
this meant a huge imbalance in the market.
i really don’t get how this is legal and why heads aren’t rolling.
case in point: saxo bank let me trade GME without an issue. but since most brokerages did not put up the new collateral, and only allowed sell...
basically this is a case of market manipulation by way of changing the rules in realtime.
i get why they changed the rules, i don’t get why the SEC is not removing the authorisation of the participants in this scheme and also not prosecuting the companies.
i’m clearly missing some info here and need to read some more on this subject.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#14Fuck robinhood I hope they are bankrupted. A company with zero integrity. I lost a huge amount of money that day. I don’t mind losing fair and square .... make a bad call, lose the dough, pay the price - that’s the deal. I’m even ok with losing for reasons I don’t understand due to the concealed rigged nature of the markets. But losing my money on the same day that robinhood manipulates the market openly and publicly…
For the record, why did Robinhood stop the trading? I know there's been an uproar, but due to the volume of articles it's been difficult to get a clearheaded idea of why Robinhood actually did it.
To answer my own question: quoting https://blog.bitmex.com/walkaway/
> "Brokers must post margin with the Depository Trust & Clearing Corporation and National Securities Clearing Corporation at the end of each day to ensure enough funds are reserved to cover any trading losses."
> The “meme” stonks’ volatility skyrocketed, which meant that the clearing organisations could ask for more collateral from brokers on the grounds of needing to protect themselves from additional potential risk when settling the brokers’ trades. It takes two business days to settle stocks in the so-called digital age…
> Robinhood in particular was told to come up with $4 billion, or they would not be able to facilitate any trading the following day. RH, apparently not having that much cash on-hand, said, “how about we stop trading or severely curtail trading in the stocks that are causing PAIN to various masters of the universe?” The clearing houses said, “OK, in that case, you would only need to post $700 million.” RH agreed to that figure, rushed to raise more money from the Street and/or Silicon Valley, and then subsequently shut off trading on Jan 28th and into the weekend. (This is information gleaned from an interview the CEO of RH gave to Elon Musk on Clubhouse).
So, it's the clearing houses that strongarmed shutting down the trading.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#15.. and almost ten ongoing movie, television and documentary projects about the GameStop fiasco
Why fiasco?
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#16I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Hard to hear.
Robinhood has normalized pay for flow, a service that is literally shaving cash off each order in exchange for “free trading”. Pff can only generate net revenue by making traders pay more per trade than actual best execution, which Robinhood is suppose to be legally required to deliver. The SEC in the 90s and 2000s thought the practice amounted to middle manning traders and should be illegal.
Basically: Robinhood gives stock purchases to a third party, who pays Robinhood for each transaction in “rebates”. If you have a free trading account other than fidelity, you are paying insane transaction fees that are hidden from you by the pff. It’s middle manning, and Robinhood is paid to enable it.
Not a fall guy, just not all the guys that need to fall.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#17Earlier quoted context omitted.
For the record, why did Robinhood stop the trading? I know there's been an uproar, but due to the volume of articles it's been difficult to get a clearheaded idea of why Robinhood actually did it.
To answer my own question: quoting https://blog.bitmex.com/walkaway/ > "Brokers must post margin with the Depository Trust & Clearing Corporation and National Securities Clearing Corporation at the end of each day to ensure enough funds are reserved to cover any trading losses." > The “meme” stonks’ volatility skyrocketed, which meant that the clearing organisations could ask for more collateral from brokers on the g…
That’s not the reason robinhood gave at the time.
Also, robinhood waited till the end of the day to lift its ban, despite other companies had followed robinhood lead lifting their bans hours earlier.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#18Earlier quoted context omitted.
To answer my own question: quoting https://blog.bitmex.com/walkaway/ > "Brokers must post margin with the Depository Trust & Clearing Corporation and National Securities Clearing Corporation at the end of each day to ensure enough funds are reserved to cover any trading losses." > The “meme” stonks’ volatility skyrocketed, which meant that the clearing organisations could ask for more collateral from brokers on the g…
That’s not the reason robinhood gave at the time. Also, robinhood waited till the end of the day to lift its ban, despite other companies had followed robinhood lead lifting their bans hours earlier.
> That’s not the reason robinhood gave at the time
Hence, lawsuits.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#19I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Hard to hear. Robinhood has normalized pay for flow, a service that is literally shaving cash off each order in exchange for “free trading”. Pff can only generate net revenue by making traders pay more per trade than actual best execution, which Robinhood is suppose to be legally required to deliver. The SEC in the 90s and 2000s thought the practice amounted to middle manning traders and should be illegal. Basically:…
Isn't the not-so-secret secret that every other brokerage also sells flow [0], but still charges the end user?
Making Robinhood just less bad than the rest.
[0] https://piper2.bluematrix.com/sellside/EmailDocViewer?encryp...
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#20I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Hard to hear. Robinhood has normalized pay for flow, a service that is literally shaving cash off each order in exchange for “free trading”. Pff can only generate net revenue by making traders pay more per trade than actual best execution, which Robinhood is suppose to be legally required to deliver. The SEC in the 90s and 2000s thought the practice amounted to middle manning traders and should be illegal. Basically:…
On the topic of trading freezes and capital requirements: there are a lot of ppl who will loan a broker money. Intersect them with the number of ppl who will and can PFF and now you are talking about 1-10orgs and most of them are high frequency middle manning the orders coming in. If you are one of the 1-10 orgs who do this 1. You’re scum and 2. You are big enough to be on both sides of this definition of the conflict of interests
What happens to RH rebates if they no longer have 1-10 of those PFF customers?