The Stock Market Thread

yeah that's interesting

 

Yes. [uck fay]ed, really. But yea. It's like patent trolling, for bonds.

 

so it's pretty obvious robinhood is going to argue they didn't have the capital to support the level of margin trading they were getting. but i'm pretty sure they also restricted buys in non margin accounts so that might not pass the smell test.

 

“Our clearing firm simply cannot afford the cost to settle those trades,” he said.

During moments of volatility, the transaction costs can spike due to risk and a variety of factors.

“We cannot use customer funds to front that cost due to regulation,” Denier said. “So the brokerages or the clearing firms have to go into their own pockets to do it. And they simply can't afford the cost.”

https://finance.yahoo.com/news/we-b...mid-the-game-stop-market-mania-172539318.html

that's just bullshit and frankly not the customers problem. that's a them problem for giving shit away for free that costs money.

 

I do respect that he basically killed his business yesterday to save the hedge funds, but I'm sure will be rewarded down the road.

 

i never thought it was a winning business model. especially with interest rates this low they aren't making money of the money markets which can be a huge profit center for firms. that leaves making money off of margin costs and market makers willing to pay you money for screwing your customers out of 2 c a trade. just doesn't seem like that would be enough to be profitable long term.

 

They were selling the data of their users to hedge funds. That's how they were making money.

With that coming out and basically coming out and shutting down buying yesterday. I don't see that it stays afloat

 

right and they were front running the trades, but like i said we are talking a couple of cents per share per trade at most for most liquid stocks. not big profits i wouldn't think even in huge volume or at least not big enough to cover their costs.

yeah shutting it down kind of ruins their whole marketing which is they are helping out the little guy. hell they named the company robinhood.

 

So what I'm reading here, is, if you have money in Robinhood, transfer it out now?

 

no i'm sure the money is protected. they all have sipc insurance.

 

ha ha

 

I would definitely flee from Robinhood right now, no matter how you look at it.

 

So, flee robinhood so robinhood dies?

 

i'd flee because they can't handle the volume. and yeah i think they are [uck fay]ed

 

If you liked robinhood, you should leave because they are not what they claimed to be.

 

I did not like Robinhood, but they were convienent for playing in crypto, without having to worry about actually dealing with crypto. You don't buy crypto from Robinhood, you kind of rent it. I didn't have to keep track of keys or wallets or anything like that. But at the same time, I didn't really own crypto, as I could just trade it, nothing else.

 

I guess as just playing, it is fine. But now you have to think that if ever something big were to develop, they would/could flip a switch and freeze you out should it suit them.

 

Yea, and since it was just to play with crypto, I can find something else.

 

Worst week for the dow in 4 months?