Re:Robinhood is said to draw on bank credit lines amid tumult
by sroussey on Thursday January 28, 2021 @07:40PM
(#25951913)
Go ask Apex Holdings.
Re:Robinhood is said to draw on bank credit lines amid tumult
by LatteLazy on Thursday January 28, 2021 @07:54PM
(#25952046)
This whole thing is a confusing mess. Do you know why Apex Holdings decided that? Why would a clearing firm do that, they're at no risk afaik...
Re:Robinhood is said to draw on bank credit lines amid tumult
by saddlerustle on Thursday January 28, 2021 @08:52PM
(#25952593)
Almost all US equities are settled by DTC. Settlement is not clearing, clearing firms still have obligations to DTC
Re:Robinhood is said to draw on bank credit lines amid tumult
by LatteLazy on Friday January 29, 2021 @10:14AM
(#25958023)
Thanks, but I'm still left wondering: why would dtc be unable to settle those trades? It seems like it would be easier for dtc to settle RobinHood trades if they were all (worst case) in one symbol than it is when clients trade 101 different names...
What issues does it create if your whole client base suddenly want to buy GME?
I guess if volumes overall go up a lot, you might need to post more capital? But since your revenue should be up too, that's a good thing right? And its only for a while, I don't think anyone thinks this will go on for months do they?
And surely it's easier for your clearing house to clear 1 name than 10,000 names?
For no-frills, long, equity positions, it feels like it should be the easiest thing in the world to do. I'm happy to be corrected, I'm aware back office logistics is a dark art so maybe I and other readers can learn something?
Edit: I'm honestly not trying to be snarky here. I just don't get why it would be that big of a problem. I'd be happy to be rescued from my ignorance.