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Multiple brokerages shut down buying due to the collateral requirements that were raised. Robinhood seems like the fall guy here, hopefully people start asking

• trestenhortz 6y ago
  That is absolutely not the reason that they publicly stated they stopped allowing purchasing and only allowed selling. I’d dance on the grave of this company.
  • bidirectional 6y ago
    Well then what is the reason? I've not seen anything else. The CEO was cagey when asked about liquidity, but every official release has suggested that the collateral requirements were the problem.
  • xadhominemx 6y ago
    Actually it is the reason they stated
    • sokoloff 6y ago
      There was a several hour period one evening where some “it’s for your own good because of the volatility” message was the first comms from the company on the topic.
      • WoahNoun 6y ago
        That's not what the message said. It said "to protect our customers." Which is consistent with the capital requirements reason. If RH didn't meet the requirements, the entire company (all of their customers; even those who knew nothing about game) would go into receivership and the company unwound. Meanwhile, no one can sell their shares while this happens. Not meeting their capital requirements would have been very, very bad for all of RH's customers.
  • elefanten 6y ago
    Who cares? Companies rush out dumb comms under pressure then walk em back or change them. They're not obligated to stick to the first thing they said on a topic -- especially when it's customer comms. It's not a good source for answering what they did / why they did it.
• kmlx 6y ago
  other brokerages simply put up the money. this meant that while huge swaths of the retail investors in the US (and parts of Europe) were not allowed to buy GME, other retail investors had no issues. to top it off, certain brokerages only allowed sell orders. this meant a huge imbalance in the market. i really don’t get how this is legal and why heads aren’t rolling. case in point: saxo bank let me trade GME without an issue. but since most brokerages did not put up the new collateral, and only allowed sell... basically this is a case of market manipulation by way of changing the rules in realtime. i get why they changed the rules, i don’t get why the SEC is not removing the authorisation of the participants in this scheme and also not prosecuting the companies. i’m clearly missing some info here and need to read some more on this subject.
  • joncrane 6y ago
    >other brokerages simply put up the money. Nope, multiple other brokerages including Interactive Brokers also suspended options trading and opening any new positions in the so-called "meme" stocks.
  • bidirectional 6y ago
    So what are you proposing? All brokerages must put up the collateral no matter what? Surely it is up to the individual businesses whether they can afford to, want to take the risk, etc.
    • tedunangst 6y ago
      Some people seem to be suggesting that when RH got the collateral call for funds they didn't have on hand, they should have instantly gone into receivership and wound the whole operation down, closing all accounts. Or something like that. They probably don't mean that, but it's the logical conclusion of what they're saying. Always have the required collateral or face instant annihilation.
  • gruez 6y ago
    >other brokerages simply put up the money ...assuming they had the money. On the day they suspended trading, they also raised $2B in funding the same night. A few days later they partially unrestricted trading.