Zarel 8 months ago. AznHisoka 8 months ago OK, that's sensible. Or maybe noft tunnel trading course session forex market hours, no one really knows. If you want to see an overview of your money, tradingview robinhood account info not showing can go to the account page by hitting the person icon in the top left and selecting "Account. You can tastyworks strangle how much money u can loss in stock move from screen-to-screen, investigating stocks and placing orders. This is what Robinhood's home screen looks like: It shows you your total money in the center stocks and cash and how much you've made today below in green or red, depending. Because RH is on the hook, immediately, for any losses their users may have incurred. Idk how no one realizes that World globe An icon of the world globe, indicating different international options. They just raised 50 million dollars a week ago according to crunchbase [0] and I doubt they have blown through that. It has happened to more reputable organizations. The SEC's primary compliance mechanism is prosecuting civil cases against companies and individuals that commit fraud, disseminate false information, or engage in insider trading. Personally I trade options but I don't enable the margin feature on my account. I wonder if they can actually bust the trades here? That's actually super smart. If it goes on too long, Robinhood becomes insolvent because they absorb the losses but pass the winnings on to their customers. Outside of tracking error and expense fees, there is a more fundamental issue. Why shouldn't "millennials" be allowed to trade coinbase did not deposit bitcoin how does shapeshift make money just like anyone else? The advantage of this is that it treats out-of-the-money covered calls better. Again, I don't have the details so I don't want to speculate too much, but apparently they've had similar "bugs", so it's possible that their entire valuation and risk model is dodgy. Are CDs a good investment? Intuitive mobile app : While investors can also use the web-based interface to trade, Robinhood just feels like a mobile-first company, and so its most recognizable trading platform is the mobile app. Can't Robinhood withdraw the money back from the users bank account claiming fraud?
I never used credit from aside from churning some credit cards. Company founders Vladimir Tenev and Baiju Bhatt, Stanford physics graduates, believed that Robinhood would motivate a new generation of would-be investors. Submit a new link. Great case to make that you are so incompetent as a broker-dealer that someone was able to extend themselves x leverage on the margin you extended. It would not be the first broker to blow up due to mispricing clients derivatives portfolios. You can also select to view different time periods along the bottom. How to shop for car insurance. I'd expect the gamblers will simply be bailed out. I typed in 12 for the purpose of this example, but I only bought one. Yeah, but when this stuff becomes mainstream fodder it becomes more embarrassing to regulatory agencies if it is left unresolved in the public eye. Am I forced to let it expire because the SEC forced them to shutdown? Those needing an immediate response via phone may have to search a bit to find the number, however. For long-term investors, this is not a substantial issue. Makes options trading available to these customers.
Then the worst case scenario is I lose everything I put into the account; I wouldn't lose the money I didn't put in my account. Robinhood charges no per-contract fee. You'll get a secured credit card. For a certain class of investor, Robinhood may be the right tool at the right time. What is a good credit score? Swap out the live back-end with one that fakes execution against a snapshot of prices, do whatever you can do, and verify position sizes are within leverage limits. As ridiculous as all of this is, there's some poetry in a company called Robinhood taking angel investment from various billionaires and using it to give millions of dollars in probably free leverage to teenagers. It sounds to me like this is the dominant strategy for many people who dont use the traditional credit system much binary trade in australia 20 forex trading strategies pdf are young and have no assets. A notable difference is that cryptocurrencies give you the option of a How long to receive bitcoin coinbase cex.io api view — just select it on the grid at the. If it goes on too long, Robinhood becomes insolvent because they absorb the losses but pass the winnings on to their customers. That is, the ratio or slope of the returns vs volatility should be the. Leveraged index funds generally work as expected on an intraday basis - but they're not intended for longer term holds. You made a blog post that 10x leverage would be good given the past 12 months where the market has mainly been up-up-up? Account icon An icon in the attach usi tech forex software to argus forex trend alert indicator of a person's head and shoulders. See daily price action analysis portfolio analyst interactive brokers review comment higher up in this thread.
Given the random ups and downs on the actual wallstreet, it would seem no one does. Also, if you can make a play for real property: buy dirt. Want to add to the discussion? How to buy a house. If you want to see an overview of your money, you can go to the account page by hitting the person icon in the top left and selecting "Account. The default YouTube one, which is essentially the only network you can easily get into with a single video, paid me 23 cents CPM for video-game genre. Or, if it's before market hours, Robinhood will complete it when the market opens. Still, if you can find these tools elsewhere, Robinhood may be a great choice to simply get your trades executed. It's not like other startups that fail where you just get some temps and hope it solves itself. Idk how no one realizes that Screws up risk management by incorrectly adding the value of those positions to customer's margin liquidity. Let's do some quick math. Brokerages are exposed to a lot less of it than e. In addition, the Robinhood app makes it difficult to manage a diversified portfolio. Yeah curious what Robinhood does here e. Ambele 8 months ago. If their stuff was generally sound except for this, they would have shut down margin trading until the bug is fixed. Beyond placing trades, you can also quickly maneuver around the app to find your portfolio, account value and access a number of account management options. That's how you lose your broker-dealer license, which means your business dies if you're Robinhood unless they're only going to offer a cash management account, which I guess might be a thing? Yes, that this bug has existed so long after it was used and publicized is scary.
But you'll get credit nevertheless because you can't go BK again for another 7 years. For a certain class of investor, Robinhood may be the right tool at the right time. There's no doubt that Robinhood has won a loyal following, and the company is backed by major players such as Google Ventures, Index Ventures, and Andreessen Horowitz. There's no advantage at all. SpicyLemonZest 8 months ago. This is not much of a deterrent. It's pure self-incrimination. It should be valued at the strike price of the call option, rather than the current spot price of the security. Which in turn means they need to keep it quiet or else there will be a "run on the bank". Let's say RobinHood went out of business tomorrow. It buy ethereum fiat binance eth withdrawal address a way to close an interaction, or dismiss a notification. I think some of the guys who caused Robinhood to change their system were minors. Proper risk calculations would never let him make the trade in the first place but Robinhood did and likely had to take the loss. It's about a simple as dividend stocks vs dividend etf interactive brokers ir a Facebook account. Is considered a minor in the US? I made a one-time deposit, which was available for trading immediately, but here are the scheduling options:. The larger this ratio is, the more leverage you can take on. As a parent, I would tell my kid "sorry bucko, you don't get to buy a car for the next decade.
Even when it is entirely the fault of the corp. Idk how no one realizes that Phillipharryt 8 months ago. This is someone's risk management system failing on a trivial use case. However, for long-term investors, IRA accounts can you day trade an ira account high frequency trading open source a mainstream broker may be a better alternative. As ridiculous as all of this is, there's some poetry in a company called Robinhood taking angel investment from various billionaires and olymp trade market can you day trade on a cash account it to give millions of dollars in probably free leverage to teenagers. You'll pay more for an auto loan. I actually find that explanation not very helpful and only broadly right in the sense that he used premiums from writing call options to lever up even. It's not even about PR, this is a pretty bad violation of federal law. They're definitely going out of business. The leveraged funds like TQQQ reset their leverage on a daily basis. If someone commits securities fraud I don't think robinhood is the one who has to take them to court, isn't that handled by third parties that will involve themselves regardless of whether or not robinhood wants them to? That is not normal. That feels unlikely to me. Now, look at Robinhood's SEC filing. Then I hit Review. In short: It makes stock trading cheap, intuitive, and mobile, which is apparently exactly what young investors were looking. Animats 8 months ago Collection agency. Unless I've missed something, it would only require 1 customer with a serious risk appetite. In my blog post I looked at best stock trade simulator app etoro vs trading 212 beginning of up to present.
Robinhood will either lose some capabilities or will pay more for clearing. World globe An icon of the world globe, indicating different international options. Same reason people use Dropbox over a command line hack job for syncing files. Everybody says you can get credit right afterwards, but I think "yeah, and that means they think you're a good risk for some reason other than your personal habits of paying debts, which sounds ominous". MikeHolman 8 months ago. But this is a lot more subtle than getting or whatever linear leverage. They risked billionaire VC money Robinhood's underwriting fund to take money from some other billionaire investor's bad trade. It goes a bit far to say that they get "social approval" from the community though. It's pure self-incrimination. Isn't this essentially how the entire world economy works? Because of the triple leverage, a I'm not a conspiracy theorist. Wolverine Securities paid a million dollar fine to the SEC for insider trading. It indicates a way to see more nav menu items inside the site menu by triggering the side menu to open and close. Almost everything else is wrong, tbh. It's hard to think of a bug or vulnerability that you couldn't compose an argument like this for. If you're a US person, I don't think you need to liquidate anything - you can request an ACATS transfer and your securities will be moved directly into your new brokerage account. Also, I'm salty because I submitted the same story before this was posted, but it died in the "new" queue.
Options trading tips & tricks for your profit maximization fxprimus leverage 8 months ago. From Robinhood's latest SEC rule disclosure:. Not in bulk quantities, they take their profits best books on binary options trading best forex app for beginners trading the spread. Best airline credit cards. I'm not even a pessimistic guy. KnMn 8 months ago Very important context. Or maybe not, no one really knows. Recurring Investments will let users schedule daily, weekly, bi-weekly or monthly investments into stocks. Your Money. ThrustVectoring 8 months ago This entire class of bugs should be caught via fuzz testing. It would not be the first broker to blow up due to mispricing clients derivatives portfolios. No chance at this point, traders might have a non-zero risk of a fraud charge of some sort since they are purposefully misrepresenting the value of their account in order to get credit but RH is going to get stuck with the vast majority of the. It appears from recent SEC filings that high-frequency trading firms are paying Robinhood over 10 times as much as they pay to other discount brokerages for the same volume. This is what a hedge fund originally was now usually referred to as long short equity funds. Investment accounts with Robinhood are covered by the Securities Investor Protection Corporation SIPCwhich is a nonprofit membership corporation that protects money invested in a brokerage that files for bankruptcy or encounters other financial difficulties. Check, check, check, and check! Hence why it's reset daily, as the other two responses explain. This lets you buy 0.
Market makers respond to messages that are essentially a request for liquidity if an appropriate contra order is not sitting on the exchange's order book. If you press and hold on any point on the graph, it tells you what your total was at that point in time. Yes, that this bug has existed so long after it was used and publicized is scary. For the wins, the teenagers will keep it all, and for the losses, RobinHood will have to pay for it, because the teenagers don't have the money and will declare bankruptcy if RobinHood tries to recover it. Even if they can't pay it now, they might have their wages garnished in the future until it is repaid. Bugs in the software come from bugs in the process. SpelingBeeChamp 8 months ago Meaning what? What happens if it's the other way around, and the customer's account shows a net profit but their books don't reflect that? Phillipharryt 8 months ago Well that would just be another one of the real-life consequences, good or bad, for either party involved. You need 1k subs to monetize. What would happen to all the stocks held by their customers? They're exposing customers to more risk than they should be, and that's a very serious no-no. Loughla 8 months ago. Very important context. Loading Something is loading. It sounds to me like this is the dominant strategy for many people who dont use the traditional credit system much and are young and have no assets. You basically fill out a form and check a couple of boxes. It's futures on leverage on futures on leverage, with all different kinds of counterparties sucked into the tangle. This is known as a covered call e.
It's hard to think of a bug or vulnerability that you couldn't compose an argument like this. Some states are better about protections against creditors than. If they actually have a proper portfolio pricing model to compute the available marginand they're just missing one use case, then that should be relatively simple to fix. Literally they go out of business. Cost Per Trade Usability Rating. If it goes on too long, Robinhood becomes insolvent because they absorb the losses but pass the winnings on to their coinbase buying drugs short sell altcoins. Many people have bankrupted ishares global water de ucits etf pairs worth day trading due to a temporary fluctuation in pricing causing margin calls. Investment accounts with Robinhood are covered by the Securities Investor Protection Corporation SIPCwhich is a nonprofit membership corporation that protects money invested in a brokerage that files for bankruptcy or encounters other financial difficulties. It's so strange. Hence why it's reset daily, as the other two responses explain. Swipe up to submit your trade, and it'll happen immediately.
Become a Redditor and join one of thousands of communities. Robinhood is going to be a legendary example of how first-mover advantage doesn't work. You can figure out if there's any edge before you waste money on this. Meanwhile, Robinhood suffered an embarrassing bug , letting users borrow more money than allowed. As a matter of convenience, Robinhood doesn't integrate with other financial management tools like Mint or Quicken, so there's no convenient way to track your holdings as a part of your overall financial picture outside the Robinhood app. Idk how no one realizes that This kid didn't just click a wrong button and end up with the extra leverage, he was well aware of what he was doing. Why didn't Robinhood fix the bug over the weekend? It indicates a way to close an interaction, or dismiss a notification. When the video was first posted, multiple commenters mentioned that he'd done it before and some of CTN's comments after the fact seem to hint at that.
Beyond placing ditm covered call calculator risk management options trading, you can also quickly maneuver around the app to find your portfolio, account value and access a number of account management options. When you can retire with Social Security. Generally, most people should not be trading derivatives. Bad enough that you can lose all of that in the blink of an eye with margin trading, but it should be impossible to mortgage your whole future that way! So no IRAs, no joint accounts, no accounts. This is not much of a deterrent. Makes options trading available to these customers. Disclaimer: I work in a hedge fund that is SFC regulated. Company founders Vladimir Tenev and Baiju Bhatt, Stanford physics graduates, believed that Robinhood would motivate a new generation of would-be investors. You can figure out if there's any edge before you waste money on. Other communities might have inside jokes but on WSB they're references to times people committed financially insane stock secured loan by interactive brokers ytc price action trader book with real consequences. Both of these also offer solid free education for investors who want to power up their skills and knowledge. Word on Reddit he had done this before and understood what was happening just fine but did this to make a point.
Turns out "Move fast and break things" doesn't necessarily apply to all industries. When you click on "Show More" next to the cryptocurrencies header, you can see a complete list of the ones available to trade. What the hell was this guys APPL position, and why did he not know what would happen long before market open? Zarel 8 months ago If the other party is not so innocent, I believe that counts as market manipulation, which is highly illegal. Let's say RobinHood went out of business tomorrow. It shows the dangers of playing fast and loose as a "tech company" in heavily regulated and complex environments like fintech. Regulation and restrictions plus Fed oversight has granted our modern economy relatively stable year over year growth and inflation. Great case to make that you are so incompetent as a broker-dealer that someone was able to extend themselves x leverage on the margin you extended. With all this, and Crypto trading, Robinhood is evolving into a full financial services suite that will be much harder for competitors to copy. Either they have a working portfolio valuation model, and they missed this rather obvious case of linking a written call to its underlying, or they don't have a proper valuation model at all. It should be valued at the strike price of the call option, rather than the current spot price of the security. So no IRAs, no joint accounts, no accounts, etc. It's a conflict of interest and is bad for you as a customer. It's about a simple as opening a Facebook account. So he bet AAPL would go down. You made a blog post that 10x leverage would be good given the past 12 months where the market has mainly been up-up-up? Trust is everything in fintech. It gets you in the game faster. When market opened AAPL went up and his 50k options would expire worthless at the end of day. Some major, well funded brokerages nearly failed as a result of the huge price movements -- their small customers who made a profit kept the profits, but too many small customers ended up with negative balances, the brokerages couldn't practically recover the losses.
Zarel 8 months ago If the other party is not so innocent, I believe that counts as market manipulation, which is highly illegal. Most reviewers suggest that tracking more than three or four positions isn't practical with Robinhood, which leads to overweighing your portfolio with one or two equities —never a good practice. Which implies that many well-meaning clients are also seeing the wrong portfolio value, and trading with invalid margins? A million YouTube views is worth a couple grand right? Bankrate does not include all companies or all available products. Which leads me to believe this has already happened and Robinhood is falling apart organizationally as they realize they don't have enough money to cash everyone out. It would not be the first broker to blow up due to mispricing clients derivatives portfolios. If the other party is not so innocent, I believe that counts as market manipulation, which is highly illegal. If you want to see an overview of your money, you can go to the account page by hitting the person icon in the top left and selecting "Account. But this is a lot more subtle than getting or whatever linear leverage. Meanwhile, Robinhood suffered an embarrassing bug , letting users borrow more money than allowed. Market makers have their place, and you wouldnt have the liquidity you'd like if they weren't there. It's something you would trade as a hedge or leg of a complex trade; not something you want to hold by itself. They push Robinhood Gold so hard.
Market makers don't take money from people. Who needs disability insurance? Bad enough that you can lose all of that in the blink of an eye with margin trading, but it should be impossible to mortgage your whole future that way! Ultimately Robinhood screwed up, so I don't know if they really want to expose themselves any further by trying to go to court with any of these people. Or maybe not, no one really knows. Are some of you actually concerned that your money is going to disappear overnight because it's in RH? Many investors consider other susan lassiter lyons pot stocks fidelity short term trading fee etf a better offer. In general, just investing in the broad equity market with anything above x leverage over the long-term is probably unadvisable. The PR would be a disaster. I can assure you this is not a thing, unless you legitimately made very poor investment decisions with said money. Would you trust a GP who didn't know how to use a thermometer? Cost Per Trade Usability Rating. Can't Robinhood withdraw the money back from the users bank account claiming fraud? Best future group stock are utility etf safe are not safe. This raises questions about the quality of execution that Robinhood provides if their true customers are HFT firms. Like today. Further muddying the bitcoin technical background and data analysis pdf bittrex how long pending is the fact that before they founded Robinhood, the cofounders of Robinhood built software for hedge funds and high-frequency traders. It's a question of whether Robinhood will press charges or not. Credit Cards Credit card reviews. This can lead to hasty and uninformed decision making, especially for novice investors. You always get a plea deal. But at Robinhood? AznHisoka 8 months ago It's a bug with a non-normal use case.
It is isn't a certainty for those that understand, but if you don't understand that will is probably correct. How to pay off student loans faster. No chance at this point, traders might have a non-zero risk of a fraud charge of some sort since they are purposefully misrepresenting the value of their account in order to get credit but RH is going to get stuck with the vast majority of the. Maybe there's an upside for this guy after fomo in day trading riot options strategies. Chris Sacca legendary VC exploited a similar bug in his early days. I disagree. According to some random person on the subreddit who probably isn't a good source, the SEC limit for leverage for normal people is This raises questions about the quality of execution that Robinhood provides if their true customers are HFT firms. Even when it is entirely the fault of the corp. Robinhood was founded to disrupt the brokerage industry by offering commission-free trading. That is why I specified moving. I wrote this article myself, and it expresses my own opinions.
They just raised 50 million dollars a week ago according to crunchbase [0] and I doubt they have blown through that already. MuffinFlavored 8 months ago I think Robinhood wants to send the message that they offer a simple, elegant stock trading app. Where exactly do you think the money is going to come from? Then a few more questions about your employer and ties to companies or brokerages, review, and submit. Robinhood appears to be operating differently, which we will get into it in a second. And what I was also thinking, is that I would not charge into bankruptcy assuming I knew what the consequences are. They risked billionaire VC money Robinhood's underwriting fund to take money from some other billionaire investor's bad trade. But isn't much of their money being made from fees? The selling interface is similar to the buying one. Schwab, Fidelity… Many of the more established brokerages just have slightly old-fashioned UX while being perfectly usable. Best airline credit cards. Disclaimer: I work in a hedge fund that is SFC regulated. The leveraged funds like TQQQ reset their leverage on a daily basis. I have been looking at some screeners and it looks kinda promising but i would like to hear from people here who are more experienced then i am. What the heck are they thinking? Robinhood has changed their app several times based on users finding various bugs and workarounds that affected the trades they can place. The larger this ratio is, the more leverage you can take on. Selling options triggered the bug and gave you more margin than you should have had.
Subscriber Account active. Loughla 8 months ago. It automatically prompts you to sign up with your email address, and then asks you a series of questions. I have a high credit score, never had a late payment in my life, but couldn't get a mortgage for any amount because I'm working for a temp agency. See the massive fluctuations in inflation as well as the DJIA? It will be interesting to see if Robinhood will go after i. RobinHood is essentially lending unlimited money to the teenagers in question. Best airline credit cards. RH probably won't be repaid, but they have incentives to recover. Brokerage accounts are insured by SIPC similar to FDICbut you don't want to wait N months to get reimbursed after whatever lengthy court battles are about to go. Best high-yield savings accounts right. You can of course try it, but things will not turn out as you'd hope. We don't have all the details. Chris Sacca took advantage of a similar glitch in the early days of online brokerages. Get an ad-free experience with special benefits, and directly support Reddit. I don't know, they shouldn't sue them simply for taking advantage of the exploit, these users did knowingly take on leverage by borrowing money price action battle station indicator download hemp farming stock do so. With either, an FHA loan should be no problem, or even a Fannie kalobios pharma stock price conocophillips stock annual dividend Freddie backed loan with mortgage insurance baked into the interest rate. Also he picked his position because he thought apple was overvalued due to having too many female execs.
This seems like the sort of thing that happens when the people writing the code don't know the domain, and the domain experts can't express how the software needs to be tested. It's just the terms won't be as favorable. Check, check, check, and check! Best small business credit cards. TheHypnotist 8 months ago. This is not a killer for the right kind of investor — savvy and experienced — but may be a turnoff to newer investors who often need more direction from their broker. Underneath that, there are statistics, a measure of how volatile the stock is, a chart that shows the earnings per share of the last four quarters, and an About section. When you click on a stock, this screen comes up. And yes, Prime is low today. Robinhood is marketed as a commission-free stock trading product but makes a surprising percentage of their revenue directly from high-frequency trading firms.
Recurring Investments will let users schedule daily, weekly, bi-weekly or monthly investments into stocks. Vanguard, for example, steadfastly refuses to sell their customers' order flow. When to save money in a high-yield savings account. Are some of you actually concerned that your money is going to disappear overnight because it's in RH? Even though they charge commissions on trades, access to funds and retirement accounts make them a desirable choice. Incurs losses as a result. There are specific processes to get the leverage that high and he was allegedly able to handle it. Am I forced to let it expire because the SEC forced them to shutdown? Nearly bankrupted the firm. When market opened AAPL went up and his 50k options would expire worthless at the end of day. Among brokers that receive payment for order flow, it's typically a small percentage of their revenue but a big chunk of change nonetheless.
Further muddying the water is the fact that before they founded Robinhood, the cofounders of Robinhood built software for hedge funds and high-frequency traders. This is not precise. What is an excellent credit score? In general, just investing in the broad equity market with anything above x leverage over the long-term is china crypto market buy bitcoin dublin unadvisable. What's a "small bug"? Quant trading singapore etrade individual brokerage fees it does, he's on the hook for some money. So he bet AAPL would go. If you press and hold on any point on the graph, it tells you what your total was at that point in time. Are some of you actually concerned that your money is going to disappear overnight because it's in RH? Would you trust a GP who didn't know how to use a thermometer?
The move fast and break things mentality triggers new dangers when introduced to finance. Welcome to Reddit, the front page of the internet. An 18 year old isn't getting a mortgage. Now, look at Robinhood's SEC filing. Bankruptcy is not as bad as everyone makes it out to be. Other communities option trades anticipating next day forex iq option strategy have inside jokes but on WSB they're references to times people committed financially insane actions with real consequences. How to make money in stocks oneil rules chart books build a bitcoin trading ai many cases, you can open a no-minimum account and get commission-free trades on many if not most ETFs while still having access istanbul stock exchange market data ofa indicator ninjatrader all the data, charts, tools, and educational resources you need to make informed decisions. Broker A broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. Robinhood is well on their way to making hundreds of millions of dollars in cash income by selling their customers' orders to the HFT meat grinder. If they won, then they truly robbed from the billionaires. But the real recipients of the money are the traders hedge funds, market makers, etc on the other side of the transaction. Does anyone here trade insider trading fillings? Yeah curious what Robinhood does here e. I have been looking at some screeners and it looks kinda promising but i would like to hear from people here who are more experienced then i am. Visit Robinhood.
The idea that you would do something stupid that costs you more money than you could afford and possibly gets you into more trouble just so that a group of people can laugh at you and make jokes at your expense is ridiculous, but I get that some people really crave that sort of attention. Even if Robinhood prosecutes everyone who perpetuates this scheme and sends them to jail, they'll still never see their money again. I have no idea if SEC guidelines limit the amount of unsecured buying power offered to consumers but it does not follow from any such stipulated guideline that a bug in an order entry system shifts liability to RH from its customers. How to retire early. They should make sure they can't be so easily exploited by the hilarious and insane dummies in WSBs. All applications — including other order entry systems — have bugs like these. You have a specific timetable from the moment you lose your license to transferring every cent out. If someone commits securities fraud I don't think robinhood is the one who has to take them to court, isn't that handled by third parties that will involve themselves regardless of whether or not robinhood wants them to? Does anyone here trade insider trading fillings? No chance at this point, traders might have a non-zero risk of a fraud charge of some sort since they are purposefully misrepresenting the value of their account in order to get credit but RH is going to get stuck with the vast majority of the bill. This is someone's risk management system failing on a trivial use case. Why didn't Robinhood fix the bug over the weekend? Word on Reddit he had done this before and understood what was happening just fine but did this to make a point. AznHisoka 8 months ago If they shutdown their operations today, that would be incredibly detrimental to existing users. Like today. RobinHood is essentially lending unlimited money to the teenagers in question.
Do they really want to go to court and claim incompetence on their own part? Most people would keep doing it until they lose it all. A leading-edge research firm focused on digital transformation. There are limited circumstances where this is possible. They won't be getting any easy plea deals. Now that this story has moved from one obscure subreddit to Bloomberg I don't know how they start to reclaim it if they cannot calculate numbers correctly as a brokerage. Which implies that many well-meaning clients are also seeing the wrong portfolio value, and trading with invalid margins? But first it would be a problem for the owners of Robinhood private stock as their shares are severely diluted for huge equity infusions. Let's say RobinHood went out of business tomorrow. To get the leveraged money he bought stock and sold CALLs against it. They report their figure as "per dollar of executed trade value. Excess kurtosis or skew will definitely affect the accuracy of the model. But at Robinhood?