Do users actually lose the stocks, if something that happens to the Robinhood itself? I live under assumption that it is not happening. In any case stocks should stay belonging to the folks who purchased them.
I doubt users will lose the stocks. This will be really weird. Worst case, you will be given some time to transfer your stocks to another brokerage and perhaps RH will make that process a lot faster than the nominal 2-3 days it takes now.
Well something weird happened already so I dobut it's that hard for them to loose your shares
Why? For a brokerage it's an existential concern. And they can't publicly admit it's a problem either, because that would likely trigger the brokerage equivalent of a bank run. (Of course, odds are they're already grappling with that as well.)
I had a neutral to negative view toward this product before today. In part due to the product’s UX having to change after a customer killed themselves and cited the app in their suicide note. [1] I noticed that before but bad stuff happens, I had not heard of further issues and it was likely a series of contributing factors. That said, this bind broke the entire concept of the branding of the product. I’d never insta…
I tend to think that it's become too common to dabble in shares. And I know this is me being a bit snotty. But there's real risk there and when I started out, I didn't use an app. I went to an office with broker and did the orders. There's a certain risk with an app, and an echo chamber. A lot of people can make silly mistakes. And that's part of the market too, but that customer killing themselves over a bad trade is a tradgedy.
Do users actually lose the stocks, if something that happens to the Robinhood itself? I live under assumption that it is not happening. In any case stocks should stay belonging to the folks who purchased them.
Stocks don't belong to you, unless you have the actual physical stock. Everybody borrow them from 3rd party who borrow them from 3rd party who borrow them from 3rd party, who actually lended them multiple time to short the stock, who borrow them from a 3rd party, who actually have the physical piece of paper in a vault somewhere. I am not even joking. And it's the same for transactions or your bank balance. The bank…
If I understand correctly, it's actually even stranger: "Nobody owns stock. What you own is an entitlement to stock held for you by your broker. But your broker doesn't own the stock either. What your broker owns is an entitlement to stock held for it by Cede & Co., which is a nominee of the Depository Trust Company, which is a company that is in the business of owning everyone's stock for them." - https://www.bloomberg.com/opinion/articles/2015-07-14/banks-...
"To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation." Non-zero chance had they not haulted trading on those symbols they would've been insolvent by close of trading today, depending on the size of the…
I’m not keeping my money with a financial institution that lies to me. End of story. Transfer initiated on my cash, and I’ll deal with moving stocks in the morning.
This is why I prefer my money be with IBKR.
I already know when it comes to volatility, they are going to choose IBKR over my account which is good because usually "my account" is fine but its the others who are doing really crazy things.
I know IBKR will be around in the morning. That's why I love them.
"To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation." Non-zero chance had they not haulted trading on those symbols they would've been insolvent by close of trading today, depending on the size of the…
I’m not keeping my money with a financial institution that lies to me. End of story. Transfer initiated on my cash, and I’ll deal with moving stocks in the morning.
I’m not keeping my money with a financial institution that lies to me.
I know for a fact my bank lies. They've been fined hundreds of millions of dollars for money laundering (it's HSBC). A few years ago I looked in to moving to a more honest bank, but I couldn't find one that also met basic criteria like having access to cash points in the UK and having a half decent mobile banking app. Literally every major bank that operates in the UK has stories of doing frankly awful things.
Since then I've joined Monzo, who do seem to be genuinely above board, but finding an honest financial institution is really hard.
A clip from one of those interviews: https://twitter.com/ChrisCuomo/status/1354994000294522881 In the entire interview there's no real answer to any question.
He just deflects
How does he deflect? He clearly states that the deposits at the clearinghouse became a problem. That does not hurt the immediate liquidity of the company itself, but does put a strain on credit lines for those deposits.
Is it just me, or did that article end... weird? Like, scrolling more, expecting it to continue. I'm sure we've been conditioned to such articles having a typical arc, that this one... didn't?
Honestly the pacing and structure of NYT articles is so weird. Sometimes I read an article and after a few well structured paragraphs it seems that they just add random additional info, go down rabbit holes and just end abruptly.
As if your grandmother wants to tell you a story and weaves in random info of every participant’s relation to your family.
Not sure I understand: High volume causes sudden operating expenses up to a billion? Like, they're launching more EC2 instances? Or is that because they suffer from slippage? And if so, why don't they adjust the spreads? And if it's slippage, why would they still allow selling but not buying? Color me skeptic, but this makes no sense. For now I believe they just come up with some story to mask their obvious, IMO crim…
Did you consider they RH us trying to start a run by spreading fear that they are going to be bankrupt soon?
"To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation." Non-zero chance had they not haulted trading on those symbols they would've been insolvent by close of trading today, depending on the size of the…
A brokerage run? Unlikely for an SIPC insured institution.