Robinhood cuts losses after transaction revenue drops • Hacker News Board

Re: Robinhood cuts losses after transaction revenue drops

#101

Post by COGlory » Fri, Nov 04, 2022, 2:20 AM UTC

wcoenen wrote: post #74

njovin wrote: post #45

Earlier quoted context omitted.

I closed my account with them during the GameStop debacle and never looked back. I wasn't trading GME but was appalled at their reaction.

I don't think Robinhood had any choice there. Trades don't settle instantly. Robinhood needs to post collateral with the Depository Trust & Clearing Corporation while settlement is pending, and the required collateral goes up with volatility. During the "GameStop debacle" they had to raise billions of USD in additional capital for this purpose, so no wonder they had to hit the brakes.

They could have frozen trades in both directions.

Re: Robinhood cuts losses after transaction revenue drops

#102

Post by scottiebarnes » Fri, Nov 04, 2022, 2:22 AM UTC

schrodinger wrote: post #72

danuker wrote: post #69

Earlier quoted context omitted.

The floor denominated in dollars can still go to zero. The utility of Bitcoin is its global payment network.

The floor of dollars is the might of the US military. If you haven’t noticed it’s prettttty strong these days.

The military has the power to stop hyperinflation?

Re: Robinhood cuts losses after transaction revenue drops

#103

Post by freefruit » Fri, Nov 04, 2022, 2:23 AM UTC

SamReidHughes wrote: post #80

skymast wrote: post #25

Why would anyone trust a financial institution with their money when they have acted like Robinhood as acted? This is a fundamental question.

Robinhood is perfectly trustworthy with your money. This is a completely nonsensical smear.

You are the product for Robinhood, as they are selling deal flow. Vladimir Tenev will always put his customers first since they are paying for the deal flow information.

How can you trust any company that has you as the product?

Re: Robinhood cuts losses after transaction revenue drops

#104

Post by blindriver » Fri, Nov 04, 2022, 2:27 AM UTC

iepathos wrote: post #46

adoxyz wrote: post #2

Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.

Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.

The problem is that right now it's not a valley. It's a downhill slope. Once it reaches a valley, I agree that it's probably a good place to buy, but we're not there yet!

Re: Robinhood cuts losses after transaction revenue drops

#105

Post by ramesh31 » Fri, Nov 04, 2022, 2:28 AM UTC

adoxyz wrote: post #2

Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.

NFTs suddenly now the Beanie Babies they always were.

Re: Robinhood cuts losses after transaction revenue drops

#106

Post by blindriver » Fri, Nov 04, 2022, 2:28 AM UTC

shrimpx wrote: post #83

2OEH8eoCRo0 wrote: post #70

Earlier quoted context omitted.

Someone I know kept averaging down and put in everything that he had as the dotcom bubble was bursting.

And did they hold a couple more years? Or for some reason they sold at bottom after averaging down?

Most dot-com stocks went to 0. There's a famous "99 percent club" of stocks that became wallpaper.

Re: Robinhood cuts losses after transaction revenue drops

#107

Post by SamReidHughes » Fri, Nov 04, 2022, 2:39 AM UTC

freefruit wrote: post #103

SamReidHughes wrote: post #80

Earlier quoted context omitted.

Robinhood is perfectly trustworthy with your money. This is a completely nonsensical smear.

You are the product for Robinhood, as they are selling deal flow. Vladimir Tenev will always put his customers first since they are paying for the deal flow information. How can you trust any company that has you as the product?

You'll be shocked to learn that Robinhood also collects interest on your cash deposits and charges interest when you borrow money on margin. And gosh, other brokers like Fidelity also often route orders to Citadel. They're filling orders at the advertised prices, and following your limit price, are they not?

You could cry you don't like their prices or you think another broker offers better transaction costs, features, or fees, but talking about "trust" is a baseless smear.

Re: Robinhood cuts losses after transaction revenue drops

#108

Post by dotnet00 » Fri, Nov 04, 2022, 2:40 AM UTC

eloff wrote: post #66

JohnJamesRambo wrote: post #64

Earlier quoted context omitted.

What a novel and original argument. Actually Bitcoin and Ethereum have a known supply and limited inflation (Ethereum is actually deflationary now) so best suited to not go to zero. The USD on the other hand… https://fred.stlouisfed.org/series/M2SL https://ultrasound.money/

With stocks, you're purchasing future profits. That puts a floor under things. With crypto you're purchasing??? There's no floor. It has limited utility.

Technically, with crypto there's always the less than legal or privacy oriented stuff. Unless you're expecting all that to suddenly disappear there's still utility to back its value there, even if not to maintain its value at the rather overinflated values cryptocurrencies like Bitcoin have (which are less practical for such purposes compared to say, Monero).

Plus, for the value to completely zero out you'd need lots of large organizations who have lots of money (be it ones who've borrowed it or ones who are 'holding' it for others) to not only run out of said money but also be unable to pull in new people with get-rich-quick schemes. Miners and stakers would also need to completely lose trust in cryptocurrency.

So, to zero it out, you would need a global economic crisis so large that it educates pretty much every 'sucker' out there, which is pretty unlikely to happen right now.

Re: Robinhood cuts losses after transaction revenue drops

#109

Post by SamReidHughes » Fri, Nov 04, 2022, 2:40 AM UTC

COGlory wrote: post #101

wcoenen wrote: post #74

Earlier quoted context omitted.

I don't think Robinhood had any choice there. Trades don't settle instantly. Robinhood needs to post collateral with the Depository Trust & Clearing Corporation while settlement is pending, and the required collateral goes up with volatility. During the "GameStop debacle" they had to raise billions of USD in additional capital for this purpose, so no wonder they had to hit the brakes.

They could have frozen trades in both directions.

They could have... prevented users from exiting their positions? How would that be better?

Re: Robinhood cuts losses after transaction revenue drops

#110

Post by TuringNYC » Fri, Nov 04, 2022, 2:42 AM UTC

iepathos wrote: post #46

adoxyz wrote: post #2

Stock market has been in a slump all year, crypto down huge. Close to 100k layoffs in tech (according to layoffs.fyi). I think people got other things on their mind than trading stocks/crypto.

Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks. The unemployment rate is still only 3.5% in the US, so anyone getting laid off is being hired back almost immediately with very little slack. The Fed would actually prefer to see higher unemployment around 6% to better manage inflation so they'll keep interest rates high until they see that happen.

>> Ironically, it's probably best to buy stocks and crypto when they are in valleys like this rather than at peaks.

Half the people in this Robinhood cohort are writing weekly leveraged (non-cash secured) puts and/or put spreads or long calls. With that popular strategy, one big market move and you're wiped out.