There is a rather large difference between how you do interfaces for people with training who are experts and the amateurs that Robinhood is targeting. It is the difference between a full cockpit and the interface you put on something like Garmin's autolanding system[1].
So, yeah, I'm blaming the interface people at Robinhood because they are targeting a non-broker segment of the population and need to find a way to put that information a broker would give you into the interface. This information includes things like "you do not own this much money" at a minimum. Facts are amazing things, but eventual truth might of save this person.
If you target a group of people, its your responsibility as a UI designer to make sure your interface is actually safe for that group of people.
But regulation requires that you do self-certify as (to a certain extent) an expert who understands the more sophisticated product in order to trade it.
I suppose I don't disagree that they're targeting people who in many cases probably shouldn't be passing that screen, but I suppose I think that's the problem, rather than it not being dumbed down enough.
Like I said elsewhere, its horrible this kid killed himself over something as transient as this, and RH's interface is pretty dumb, but if you're selling uncovered put spreads, and covering them with call spreads and you're doing all of this in RH....well you're either much better at RH than I am, or much worse.
Could the UI be better? Probably. My point isn't to absolve them here, it's just to point out that this same issue exists across most of the platforms. That leads me to believe that, while the UI may have contributed, it's not the root cause of the issue.
These instruments are very high risk and not really meant for average investors. Their primary goal is for hedging and leverage.
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One of the reasons for the "Black Friday" (kicking off the Great Depression) was the proliferation of leverage among people who didn't really understand it. That's why most other companies make you sign forms and ask for verbal agreements before allowing you to have access to things this dangerous.
Black Thursday. Black Friday is the name of the crash in the federal gold market half a century earlier - or more commonly, the yearly American mega-sale event that follows Thanksgiving.
Robinhood already asks for information about your net-worth, income, etc. The problem is that they verify nothing (at least in my experience). I read /r/wallstreetbets all the time, and plenty of 18 year olds say they are making 100k+ and RH just approves them. They need to improve that process.
I marked that my liquid assets are under 25k, net worth is under 25k, and yearly income is under 25k (all the lowest you can select) and they approved me for option trading instantly.
Looking at GOOG the UI shows me put where the max loss is $8.5k. Seems reckless if they really use the information I gave them to determine what level of risk is appropriate.
Better verification of a person's financials and trading knowledge before allowing this access would be helpful.
Yes, but I think it's important to note that every other broker I've used presents the information in the same way and the way they are displaying the info is an accurate representation of the state of the account at that moment.
Blaming bad UI is the easy way out here. Robinhood should take the blame for this, but not because of bad UI. Robinhood should be at fault because the knowingly allow tons of "investors" to have options trading access with little or no screening and verification.
Blaming the UI here would be like blaming a single specific gun maker for a mass shooting, when the real question you should be asking is how did this person get a gun at all?