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A comment on Robinhood denies claims that it sold GameStop shares out from under its traders. Parent comment

Re:Robinhood denies claims that it sold GameStop shares out ... by throwaheyy on Friday January 29, 2021 @11:06PM (#25965917)
Calling it a “bailout” is mischaracterising it. The solvency of Robinhood wasn’t in question.

The funds they put up at the clearinghouse are to manage settlement of customer trades. They had to stop allowing customers to open new positions because they needed to deposit more settlement margin at the clearinghouse. The margin required depends on the volatility of the stock symbol, and in this case clearinghouse increased the margin requirement for GME to 100%, on top of the higher demand for shares by customers.

As for paying the price, I’m pretty sure no broker is ever liable for theoretical profits missed out on.

[ Parent | on HN ]
Re:Robinhood denies claims that it sold GameStop shares out ... by ogre_codes on Friday January 29, 2021 @11:16PM (#25965977)
> Calling it a “bailout” is mischaracterising it.

It was an unplanned loan so they could continue operating effectively. If you want to pick nits and say it's not a bail-out... whatever. It's not business as usual.

[ Parent | on HN ]