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A comment on Robinhood stock trading app confirms $110M raise at $1.3B valuation. Parent comment

Re:Robinhood stock trading app confirms $110M raise at $1.3B... by ThrustVectoring on Wednesday April 26, 2017 @02:16PM (#14205539)
Uhm, what? That's still fully secured. It's actually 4/3rds secured, not 1/3rds. If you have $1000 in your account and borrow $2000 to buy stocks, you've got $3000 worth of stocks that they can sell to cover a $2000 loan. Whenever this ratio goes near or below 1, they can sell the secured stocks to cover it.
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Re:Robinhood stock trading app confirms $110M raise at $1.3B... by jbooth on Wednesday April 26, 2017 @04:31PM (#14206702)
If the stocks (or wacky option/derivative trade) still have value, then yeah, there's no problem.

The problem is when people make a bet that doesn't work out. There are a lot of exotic trades that can clean you out completely in an instant if you bet wrong.

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Re:Robinhood stock trading app confirms $110M raise at $1.3B... by jfim on Wednesday April 26, 2017 @05:14PM (#14207050)
It doesn't even need exotic trades. If you're doing margin trading on a stock for which there is a sudden dip in stock price (as in previous flash crashes), then there will be a margin call and from the customer's perspective, all their money and shares will evaporate.

I wonder how Robinhood will handle it when it happens.

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