It’s really kind of ironic. People are knee-jerk blaming RH for closing margin positions because they didn’t fully understand how they work and the risks involved. Simultaneously, the same people are blaming RH for stepping in the way of what very certainly would have turned into a bad trade for a lot of people.
I don’t take RH’s side but it’s hard to see a winning play for them, it’s damned-if-you-do-damned-if-you-don’t.
No, RH is saving their own asses from the poor financial decisions of their clients. They don't want to be on the hook when those accounts crater along with GME.
If this is true, RH and other platforms pulling smiliar stunts should be sued out of existence.
Take it up with the SEC. Oh, wait, the SEC is at least partially responsible for such rules being in place. It's a conspiracy, I tell ya!
People that think they'll get rich off pocket-change investments, are not in a position to understand trading on margin, nor it's risks.
However, they should have inserted some notice in the UI that this was a result of a margin call that couldn't be met, given the level of knowledge of many of their users.
Do you have evidence that happened, or are you arguing from pure cui bono circumstantiality?
GME purchases blocked this morning on apps where Citadel is the clearing house.
SOMEONE proceeds to ladder short sell GME to cause a massive price dump.
Users are margin called from previously profitable positions (without being able to provide buying pressure needed to fight against a ladder short sell)
Shorts are able to unethically cover your position.
Read into this... it's all over the news and verifiable with documentation from various regulatory agencies.