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An Update from Robinhood’s Founders

blog.robinhood.com

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Re: An Update from Robinhood’s Founders

#71

Post by rpdillon »

jennyyang wrote: post #34

I know quite a few people that were personally affected by this and lost money due to the two outages and they are all pulling their money from Robinhood. The fact that they can't offer any compensation might be a big problem for them, since they already have zero trading fees, which is what most brokerages offer as compensation. Personally it doesn't pass the smell test for me. The load was much higher the previous…

I'm not sure it's fair to assume that service gets automatically restored when load dissipates after failures due to high load.

Re: An Update from Robinhood’s Founders

#72

Post by jjeaff »

manigandham wrote: post #69
majormajor wrote: post #27

Earlier quoted context omitted.

"Missed out" doesn't seem like the right phrase here. If you already owned the stock, you still held it, no? So people who were going to continue to sell off got lucky that they couldn't make that trade, and people who were going to buy got unlucky? Does anyone seriously expect compensation, or think that it's deserved, or is it group wishful thinking? How would it even work? Would they just take people's word for th…

Only possible claims would be limit orders set before the outage that didn't execute but were in the price range.

And even then, limit orders are placed on a best effort basis. I'm sure their terms of service say as much. I have had limit orders not get placed before on otherwise functioning platforms.

Re: An Update from Robinhood’s Founders

#73

Post by rpdillon »

manigandham wrote: post #65
mkchoi212 wrote: post #63

It's cool that the founders of the company publish blog posts like this for a short outage. Hope other CEOs learn from this and become even more transparent in the future :D

Short outage? They were down for almost the entire trading yesterday and hours today. And there's barely any transparency in this post compared to standard post-mortems.

Was this their post-mortem? I didn't see anything to indicate that.

Re: An Update from Robinhood’s Founders

#74

Post by res0nat0r »

cocire wrote: post #57
tbrock wrote: post #45

Earlier quoted context omitted.

Yes and they limit you to throwing 1024 packets per second per network interface at it. Of course you could run your own dns cache per host/pod whatever.

you've got me so curious, could you please point me to the aws docs?

Your VPC has a DNS server at .2 of your VPC CIDR block that is mounted via loopback on the dom0 and exposed to your VPC to let you do lookups via their DNS infra.

https://aws.amazon.com/premiumsupport/knowledge-center/vpc-e...

Re: An Update from Robinhood’s Founders

#75

Post by asah »

throwsprtsdy wrote: post #48
dilly_li wrote: post #20

Start from the email notification. They have been asking themselves the easy questions. Just look at the top questions in their email: * Are the funds in my account safe? Yes, your funds are safe. * Was my personal information affected? No, your personal information was not affected. * Can I use my Robinhood debit card? Yes. If you have a debit card, you should have been—and should still be able to—use your card, but…

I think it's unlikely that Robinhood (or any brokerage) would compensate people for losses on hypothetical trades that could have been made during an outage. Such a policy would allow customers to pick their entry and exit points, and extract money from the brokerage at will. Even if the trades were well-defined at the time the outage occurred, there would still be an asymmetry between people demanding compensation o…

Are expiring in-the-money options a "hypothetical trade" ?

Re: An Update from Robinhood’s Founders

#76

Post by PaywallBuster »

tbrock wrote: post #7
mjs33 wrote: post #3

Their DNS system failed? How?! Unless DNS stands for “Do Not Sell”

This happened to us at Hustle years ago. Basically if you run on AWS there’s a DNS server provided inside each VPC that usually works fine but which has no observable load metrics etc... so you don’t really know you are slamming it and are about to have a problem unless you audit your entire codebase. Why? Well that tiny DNS server has certain capacity constraints and if you don’t cache DNS lookups by using a http/ht…

AWS should simply provide monitoring and alerting by default on these footnote service limits.

Re: An Update from Robinhood’s Founders

#77

Post by benmanns »

asah wrote: post #75
throwsprtsdy wrote: post #48

Earlier quoted context omitted.

I think it's unlikely that Robinhood (or any brokerage) would compensate people for losses on hypothetical trades that could have been made during an outage. Such a policy would allow customers to pick their entry and exit points, and extract money from the brokerage at will. Even if the trades were well-defined at the time the outage occurred, there would still be an asymmetry between people demanding compensation o…

Are expiring in-the-money options a "hypothetical trade" ?

Those are automatically exercised at expiration.

Re: An Update from Robinhood’s Founders

#78

Post by Itsdijital »

I have mixed feelings of sympathy about this whole RH thing.

Anyone who has used RH regularly should be well aware of how inept it is. Any spikes in volume or volatility, even on a single stock, bring it to it's knees pretty often. Like not just the last week, but even during calm periods. I've personally lost 20-30% on positions solely because RH was bugging out, thankfully I use RH just for "fun trades" usually I cannot fathom having the balls to trade any real amount of money on the platform while being aware of these long term issues.

On the flipside I feel for new users and perhaps even generally inactive users who weren't aware of RH's incredible flakiness. I'd imagine (or hope to) the losses of most of those users were small, assuming they were new or casual and just testing the waters.

Even if one of my small plays hit it big on RH, the money would just go to my main account on TD (which has been smooth all week shy of a few hiccups Fri morning during record volume). It's been obvious for a long time that RH should not and cannot be trusted. If you're trading options with a $60K account on RH, well, I don't even have words for that level of ignorance.

Re: An Update from Robinhood’s Founders

#79

Post by benmanns »

manigandham wrote: post #62
aloknnikhil wrote: post #29

Genuine question: With no commission trading at places like Schwab and eTrade, is it even worth trading on Robinhood? For as far as I could remember (about 2 years ago), Robinhood has always failed to scale.

Options are completely free on Robinhood while they still have a per-contract fee at other brokerages. If you don't care about that then no, there's no reason to stick with Robinhood.

Additionally Robinhood self clears options (or for some other reason?) and does not charge the Options Clearing Corp fee of $0.055/contract or the Options Regulatory Fee of $0.0388/contract which all other brokers charge (incl. ones with $0 or flat rate commissions/fees like WeBull, Gatsby, Tradier). All you pay is the FINRA and SEC fees on sells of about a penny each for small trades.

Actually, if anyone knows of another broker who _doesn't_ charge these, please let me know. If you're first for the broker I'll give you $20 for the tip.

Re: An Update from Robinhood’s Founders

#80

Post by balls187 »

jennyyang wrote: post #34

I know quite a few people that were personally affected by this and lost money due to the two outages and they are all pulling their money from Robinhood. The fact that they can't offer any compensation might be a big problem for them, since they already have zero trading fees, which is what most brokerages offer as compensation. Personally it doesn't pass the smell test for me. The load was much higher the previous…

How did they lose money?
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