Robinhood, in Need of Cash, Raises $1B from Its Investors

Re:Robinhood, in Need of Cash, Raises $1B from Its Investors by FabHK on Friday January 29, 2021 @12:02PM (#25959535)

The mismatch between the speed of trading and the speed of settling can under extreme circumstances cause problems, evidently.

> It feels like slow movement of money in our financial system causes a lot of these problems

I'd turn that around and say that the hyper fast trading causes a lot of these problems, and in particular creates more problems than it solves.

Introducing a Tobin Tax and replacing continuous trading with frequent auctions (maybe with stochastic end times, to limit sniping) would alleviate a lot of these problems, and put the rent-seeking HFT traders out of a job, while not impeding the important price discovery and capital allocation functions of the market much at all, I think.

[ Parent | on HN ]

Re:Robinhood, in Need of Cash, Raises $1B from Its Investors by 8note on Friday January 29, 2021 @12:23PM (#25959786)

What's a Tobin tax?

[ Parent | on HN ]

Re:Robinhood, in Need of Cash, Raises $1B from Its Investors by FabHK on Friday January 29, 2021 @12:24PM (#25959814)

Oh, sorry, it's this very simple idea that every trade is subject to a tiny fee (a few basis points). Totally irrelevant if you buy for the long term, but utterly destroys the business model of HFT.

https://en.wikipedia.org/wiki/Tobin_tax

EDIT to add: Appropriately enough, Wikipedia says:

> Another term for these broader tax schemes is Robin Hood tax, due to tax revenues from the (presumably richer) speculator funding general revenue (of whom the primary beneficiaries are less wealthy)

[ Parent | on HN ]