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Re:Robinhood is limiting purchases of stocks: AMC, Blackberr... by JumpCrisscross on Thursday January 28, 2021 @12:50PM (#25945652)
> Why would robinhood be any more liable than other online traders like Fidelity or etrade?

Every brokerage house ultimately vouches for their clients.

Robinhood has extra exposure because clients could claim its interface induced them to overtrade.

> Robinhood likely routes most of it's trades through citadel

Do we have a source for this?

Also, Citadel just made money bailing out Melvin Capital. The short squeeze let them buy assets at dimes on the dollar. Assets which do not include GameStop shorts.

> which has informed partners it will not be fulfilling GME or AMC or BB trades

Former market maker. When trading got crazy we'd take profits. When it got inexplicable, we'd pull the plug. If we didn't, risk would. In this case, there is the additional factor of political risk--you don't want to be making millions of dollars off GameStop at its peak when that's going to cost you tens of millions of legal fees in front of Congress.

A simple explanation for Robinhood's behavior might be that their customers, the market makers, backed away from paying for this order flow.

All this said, I'd be highly pissed if my broker did this to me. But Robinhood customers have known since the beginning they weren't the customer.

Re:Robinhood is limiting purchases of stocks: AMC, Blackberr... by mthoms on Thursday January 28, 2021 @01:27PM (#25946452)
>> Robinhood likely routes most of it's trades through citadel

>Do we have a source for this?

Yes.

https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%2...