An Update from Robinhood’s Founders • Hacker News Board

Re: An Update from Robinhood’s Founders

#91

Post by kccqzy » Wed, Mar 04, 2020, 4:16 AM UTC

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…

No brokerage will do that. Here's an excerpt from the account agreement of Schwab, a respected discount broker:

> During periods of heavy trading and/or wide price fluctuations ("Fast Markets"), there may be delays in executing your order or providing trade status reports to you. […] Schwab is not liable to you for any losses, lost opportunities or increased commissions that may result from you being unable to place orders for these stocks through the Electronic Services.

Re: An Update from Robinhood’s Founders

#92

Post by jiqiren » Wed, Mar 04, 2020, 4:19 AM UTC

balls187 wrote: post #80

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?

Quick example: They bought puts on Friday and couldn't unload them for a full day + following morning.

Monday morning puts were down - it was obvious the market was recovering in a big way. Instead of cutting losses at ~20% in the morning they lost ~99% of their position. Some lost 100% since the options expired EOD.

Re: An Update from Robinhood’s Founders

#93

Post by jzl » Wed, Mar 04, 2020, 4:20 AM UTC

Itsdijital wrote: post #86

benmanns wrote: post #79

Earlier quoted context omitted.

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 an…

Trust me, please trust me, you really really really want to be paying a competent broker when trading options. If it's chump change you're trading, sure, use RH. If it's serious money, the $0.65/contract or whatever pays for itself many times over. Even if it's just the ability to regularly get filled between the spread it pays for itself.

Yeah, there seems to be no end to the horror stories of options trades on Robinhood having significant delays before being filled, costing people far, far more than 65 cents.

You get what you pay for.

Re: An Update from Robinhood’s Founders

#94

Post by kccqzy » Wed, Mar 04, 2020, 4:20 AM UTC

benmanns wrote: post #79

manigandham wrote: post #62

Earlier quoted context omitted.

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 an…

What kind of options are you trading such that the fee of a few cents per contract is noticeable? The bid-ask spread is wider than that.

Re: An Update from Robinhood’s Founders

#95

Post by [deleted] » Wed, Mar 04, 2020, 4:21 AM UTC

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…

[deleted]

Re: An Update from Robinhood’s Founders

#96

Post by UncleMeat » Wed, Mar 04, 2020, 4:26 AM UTC

0x8BADF00D wrote: post #88

Itsdijital wrote: post #78

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 c…

It’s another example of why DevOps has become a buzzword and most teams just pay lip service to it.

Everything has outages. Is this the new narrative now that we've moved on from the leap year thing? That RobinHood is just a bunch of shitty engineers?

There are no public details about the root cause.

I think RH is bad for people in general, but this pile-on is outrageous.

Re: An Update from Robinhood’s Founders

#97

Post by UncleMeat » Wed, Mar 04, 2020, 4:27 AM UTC

jiqiren wrote: post #92

balls187 wrote: post #80

Earlier quoted context omitted.

How did they lose money?

Quick example: They bought puts on Friday and couldn't unload them for a full day + following morning. Monday morning puts were down - it was obvious the market was recovering in a big way. Instead of cutting losses at ~20% in the morning they lost ~99% of their position. Some lost 100% since the options expired EOD.

> it was obvious the market was recovering in a big way

Was it? Markets started up today but ended way lower.

Re: An Update from Robinhood’s Founders

#98

Post by tomc1985 » Wed, Mar 04, 2020, 4:33 AM UTC

illnewsthat wrote: post #15

ilrwbwrkhv wrote: post #6

wasnt this cause by leap year and them not taking that into account?

They denied that on Twitter: https://twitter.com/AskRobinhood/status/1234861941413351434

So what of the screenshot in the original twitter post? Was it doctored? Showing GMT?

Re: An Update from Robinhood’s Founders

#99

Post by tomc1985 » Wed, Mar 04, 2020, 4:34 AM UTC

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

It was a useless puff piece that said absolutely nothing of interest. How is that worthy of a pat on the back?

Re: An Update from Robinhood’s Founders

#100

Post by throway9812 » Wed, Mar 04, 2020, 4:34 AM UTC

kccqzy wrote: post #91

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…

No brokerage will do that. Here's an excerpt from the account agreement of Schwab, a respected discount broker: > During periods of heavy trading and/or wide price fluctuations ("Fast Markets"), there may be delays in executing your order or providing trade status reports to you. […] Schwab is not liable to you for any losses, lost opportunities or increased commissions that may result from you being unable to place…

This is absolutely not true. Broker-dealers and brokerages routinely credit clients for execution out of line with the market. Schwab does in fact give price adjustments for slowly or incorrectly handled orders.

The reason nobody will be compensated here is due to two things,

(1) There is no way to determine what a fair execution would have been, since clients couldn't submit orders in the first place.

(2) Clients will adversely select their losing trades for corrections and this would bankrupt Robinhood in about five minutes.

Source: work at a wholesaler.