Re:Class Action Lawsuit Filed Against Robinhood
by youeseh on Thursday January 28, 2021 @05:46PM
(#25950603)
Yes, the factors are governed by how they make money.
If one is not the customer, then they are the product!
Re:Class Action Lawsuit Filed Against Robinhood
by nrmitchi on Thursday January 28, 2021 @06:57PM
(#25951319)
tldr; even if Robinhood does it's own clearing (which I'm not suggesting they don't) it's reasonable to not risk their business to support the current market. Does "the market can remain irrational longer than Robinhood can remain solvent" apply here?
Any valid argument that would cause another clearing house to not be able to afford to handle these orders would seemingly-equally apply to Robinhood's own clearing house; no matter who owns it, the clearing house can't afford to go broke.
If someone is arguing that Robinhood should have the risk tolerance and reserves of a larger financial institution in order to service high volatility trades.... then maybe that person should use a larger financial institution to place these high volatility trades.
Re:Class Action Lawsuit Filed Against Robinhood
by 6nf on Thursday January 28, 2021 @05:31PM
(#25950407)
I thought RH used Citadel
Re:Class Action Lawsuit Filed Against Robinhood
by einrealist on Thursday January 28, 2021 @05:35PM
(#25950452)
They write about it in their FAQs: https://robinhood.com/us/en/support/articles/whats-clearing-...
But still, I think that there are legitimate factors for why Robinhood stopped taking buy orders for those stocks, like ensuring liquidity through clearinghouse deposits while trades are underway.