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Robinhood reports 43% revenue decline

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Re: Robinhood reports 43% revenue decline

#151

Post by f-securus »

dragontamer wrote: post #66
dangerlibrary wrote: post #64

Earlier quoted context omitted.

"Not being able to transact GME" is one thing, but they disabled the ability to buy, and kept the ability to sell. It wasn't a symmetric freeze - it was a deliberate action that could only have one outcome on the stock price. It doesn't matter what the reason is - underfunded collateral or otherwise. The experience they provided to their customers was "you can only sell this stock, nobody can buy it." That's not thei…

> "Not being able to transact GME" is one thing, but they disabled the ability to buy, and kept the ability to sell. It wasn't a symmetric freeze - it was a deliberate action that could only have one outcome on the stock price. Because Robinhood didn't have enough margin to keep buying GME. But if you sold GME, that reduced the margin Robinhood had to keep. ------- In other words: Robinhood has no more money to buy G…

If majority of retail was blocked out of buying during this period, then who was on the other end of the transaction and why do you think they would be buying when retail has the buy button turned off and the stock is 'severely disconnected from reality'? Could Robinhood have disabled margin accounts and only allowed people to purchase with settled cash as a way to keep the margin requirements in check?

It seems big money was conspiring against retail and makes it difficult to trust the current opaque system.

Re: Robinhood reports 43% revenue decline

#152

Post by bombcar »

8ytecoder wrote: post #82
bombcar wrote: post #16

Earlier quoted context omitted.

Robinhood added fractional shares before other brokers (and some still don’t have them) which is a minor advantage I guess.

Instant Deposits & Withdraw. Access to detailed MorningStar analysis for just $5/mo. (May be other brokerages have started matching Robinhood but the one I use ETrade still takes 2 full days to settle and then another 3 days to withdraw cash. It also takes 2-3 working days to deposit cash. So if you spot a buying opportunity you can't. Or, you'd always keep cash lying around and ready in the account.)

Or get a margin account, as that's all Instant D&W is.

My TD Ameritrade lets me buy from deposit instantly, and doesn't "show" margin usage as it clears, even though it's clear from the amount I can buy that it's just the margin on the account.

Withdrawals are basically instant, too though the ACH takes its normal time.

Re: Robinhood reports 43% revenue decline

#153

Post by bombcar »

bpicolo wrote: post #118
ceeplusplus wrote: post #51

Earlier quoted context omitted.

I've used Fidelity's new UX, as well as Vanguard's, and both are still way behind Robinhood in terms of just usability, nevermind addictiveness. Robinhood also makes it easy to take on insane amounts of risk through options and margin whereas that kind of leverage is difficult to achieve elsewhere.

You used to be able to move funds into vanguard + purchase in a single submission in Vanguard (though clearly multiple steps on their end). The new app seems to only offer sending money to money market settlement, before waiting two days to transact. A real pain of a change, unless I'm missing a way to do it.

At least via the web interface for Vanguard the way I do it is start with a buy order, and then when it says "where funded" hit "new deposit" or whatever it is.

They then let me buy whilst the money is inflight.

Re: Robinhood reports 43% revenue decline

#154

Post by thebean11 »

drexlspivey wrote: post #149
thebean11 wrote: post #102

Earlier quoted context omitted.

Ah TIL that the requirements would be different per-stock. It still seems to me that Robinhood should be able to fulfill orders for customers who had fully settled funds in the account. If I have money in my account (fresh from my bank account) that money is enough for 100% collateral.

They can't use customer funds for collateral to the clearing house, they must use their own funds

Might be missing something, if I deposit $100 and use it to purchase stock, they cannot use my $100? What does that even mean given that money is fungible?

Re: Robinhood reports 43% revenue decline

#155

Post by bombcar »

notyourwork wrote: post #110
ceeplusplus wrote: post #51

Earlier quoted context omitted.

I've used Fidelity's new UX, as well as Vanguard's, and both are still way behind Robinhood in terms of just usability, nevermind addictiveness. Robinhood also makes it easy to take on insane amounts of risk through options and margin whereas that kind of leverage is difficult to achieve elsewhere.

Fidelity's offering is fine. I don't need confetti to confirm my trades.

You're saying replacing red negative numbers with poop emojis wouldn't just make your day?

Re: Robinhood reports 43% revenue decline

#156

Post by mazlix »

dragontamer wrote: post #88
dangerlibrary wrote: post #68

Earlier quoted context omitted.

I'm not confused why they did what they did. I understand the situation they were in. I'm saying they shouldn't have done it, and that there is an obvious conflict of interest when there's a short squeeze on hedge funds going on, and Robin Hood's paying customers are hedge funds. Stock freezes happen. They are, all things considered, fairly routine affairs. This was not a stock freeze - it was a company that got out…

> I'm saying they shouldn't have done it They had no choice. They literally couldn't obtain any more GME stock. You cannot squeeze blood out of a stone. What do you want Robinhood to do? The GME situation got into a "sold out" situation. Much like how a toy-store runs out of Furbies back in the 90s, Robinhood ran out of GME-stock to sell to its customers. They would allow "selling", because Robinhood can then obtain…

You're saying they'd sell it to the next customer, but Robhinhood wouldn't sell it to the next customer - so that's where this seems to break down. When a RH user placed a sell order why couldn't the buy side of their order book add that?

Re: Robinhood reports 43% revenue decline

#157

Post by f-securus »

Denvercoder9 wrote: post #89
dangerlibrary wrote: post #68

Earlier quoted context omitted.

I'm not confused why they did what they did. I understand the situation they were in. I'm saying they shouldn't have done it, and that there is an obvious conflict of interest when there's a short squeeze on hedge funds going on, and Robin Hood's paying customers are hedge funds. Stock freezes happen. They are, all things considered, fairly routine affairs. This was not a stock freeze - it was a company that got out…

There's a big difference between a stock freeze imposed by an exchange, and a broker prohibiting its clients from trading a given stock. If you're actively preventing your clients from selling the stock they own, that costs them actual money if the stock goes down and can very well end in expensive lawsuits. If you prevent them from buying more stock, they only lose the opportunity cost, which is generally much harde…

If a broker that handles a very large portion of retail trades suddenly blocks purchasing a security that retail trading has driven the price up then it stops retail pressure and the stock price will obviously drop.... you could say Robinhood cost retail money by removing the upward pressure on the stock. The SEC report on the incident mentions the price rise was mostly due to retail FOMO, and not the suspected short squeeze that got the early folks attention.

A laymen would look at what Robinhood did and think Robinhood cut the fuse to the short squeeze bomb.

Re: Robinhood reports 43% revenue decline

#158

Post by WoahNoun »

wonnage wrote: post #81
sandworm101 wrote: post #43

Earlier quoted context omitted.

>> just stop letting customers trade with unsettled funds. I can think of nothing an app-based brokerage could do that would anger customers more. The entire point of the app is to facilitate quick and easy trading. The job of the app providers is to abstract away all of the backroom accounting. Requiring customers to wait for settlement would cause a riot.

You can't trade with unsettled funds, it's an SEC violation

RH defaults accounts to margin accounts to support their "instant deposit" feature.

Re: Robinhood reports 43% revenue decline

#159

Post by HideousKojima »

jasode wrote: post #24
ryanmcbride wrote: post #2

I feel like regardless of the reasons they did it, whether or not it was necessary, they lost a lot of good faith with the users when they locked the GME and crypto trading during that whole thing. I have no idea how necessary their actions were but regardless of its necessity it still cost a lot of user good will.

>I have no idea how necessary their actions were It was financially unavoidable for Robinhood because they didn't have the _extra_ billions$ in collateral deposited at the clearinghouse to back up their customers' trades (e.g. GME). Various stories about it having to raise extra billions in an emergency: https://www.google.com/search?q=robinhood+emergency+raise+bi... But retail traders (not the professional traders l…

The real issue to me is that Robinhood said they were halting GME trading to "protect users" or something along those lines. The CEO of one of their direct competitors, Webull, came out and was honest with people, and straight up told them that the clearinghouses raised collateral requirements to 100% for GME trades. Not sure how Webull's revenue did in comparison, but I'm hoping their policy of being honest was better for them than Robinhood's lame PR lies.

Re: Robinhood reports 43% revenue decline

#160

Post by filoleg »

rurp wrote: post #47
jasode wrote: post #24

Earlier quoted context omitted.

>I have no idea how necessary their actions were It was financially unavoidable for Robinhood because they didn't have the _extra_ billions$ in collateral deposited at the clearinghouse to back up their customers' trades (e.g. GME). Various stories about it having to raise extra billions in an emergency: https://www.google.com/search?q=robinhood+emergency+raise+bi... But retail traders (not the professional traders l…

I don't know, not having enough collateral to fund normal operations seems like a failure on the company's part to me. It's not like the collateral was an unknown requirement, it's the normal way the system works. RH failed to adequitely plan for a surge in activity, which seems like an odd thing to blame retail trader ignorance on.

> Not having enough collateral to fund normal operations seems like a failure on the company's part to me. It's not like the collateral was an unknown requirement.

Collateral was a known requirement in known amounts. And then the clearing house increased that known collateral requirement amount overnight, due to GME volatility. That overnight increase was a complete unknown until it actually happened.

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