Re:Robinhood is said to draw on bank credit lines amid tumult
by s_dev on Friday January 29, 2021 @03:48AM
(#25955372)
Are high frequency traders not a thing? Where trades are made according to speed -- and lots of trades. How does this not impact the same system?
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Re:Robinhood is said to draw on bank credit lines amid tumult
by maest on Friday January 29, 2021 @04:22AM
(#25955549)
HFT hold no overnight positions (with rare exceptions) so don't have to worry about settling.
Re:Robinhood is said to draw on bank credit lines amid tumult
by blueblisters on Friday January 29, 2021 @04:19AM
(#25955534)
HFT firms are apparently hooked up directly to the exchange. So they probably settle trades in real-time. The whole chain of retail to broker to clearinghouse is what creates the need of credit-collateral at every stage and create systemic risk if some players don't have the right risk control in place. At least that's what I have figured from a few hours of reading.
Re:Robinhood is said to draw on bank credit lines amid tumult
by dmurray on Friday January 29, 2021 @05:44AM
(#25956003)
> So they probably settle trades in real-time.
They do not. They settle trades in 2 business days like everyone else. Think about it: if you sell a share to a HFT, how could the HFT receive it immediately when you don't need to deliver it for two days?
However there is a process called CNS (Continuous Net Settlement) which means you generally only have to settle the net of your trades each day.