Yeah, that's not cool at all. I mean, it's probably going to help the people involved, but they bought at their own risk and they have the right to hold or sell at their own risk. That's really crossing a line that shouldn't be crossed.
I guess I don't know if Robinhood is technically the money manager on those accounts or not. Maybe they've got the legal right in some fine print to make trades on the account holder's behalf, but if I had any money in Robinhood I'd be shutting down my account today. [Reply]
Originally Posted by ReynardMuldrake:
Unreasonable risk to whom? That is suuuuuper shady.
Whether they should be in the role of protecting people is subject to debate, but this is insanely risky to anyone buying in right now.
One month from now, GME will likely be worth $20. If you're buying now, you're betting that you can time it right and not lose your ass before then, and people have never been able to time the market. [Reply]
Originally Posted by ReynardMuldrake:
Unreasonable risk to whom? That is suuuuuper shady.
The brokerage.
The kind of people doing this stuff with Gamestop or bidding up bankrupt Blockbusters liquidating holding stock up 2000% in 2 days are absolutely people trading on maximum margin loans. If you lose their money trading there isn't any house or car to reclaim. [Reply]
Originally Posted by Rain Man:
Yeah, that's not cool at all. I mean, it's probably going to help the people involved, but they bought at their own risk and they have the right to hold or sell at their own risk. That's really crossing a line that shouldn't be crossed.
I guess I don't know if Robinhood is technically the money manager on those accounts or not. Maybe they've got the legal right in some fine print to make trades on the account holder's behalf, but if I had any money in Robinhood I'd be shutting down my account today.
Help them? Robinhood sold their shares at the extreme low today. 45 minutes later would have made a >$800,000 difference to this customer. [Reply]
On a much more minor note, I've got an account at Schwab. I opened it online and have never spoken to a human being, which is how I want it.
Except once.
Years after I opened the account, I got a call out of the blue from someone I'd never heard of. He said, "I'm your broker at Schwab, and I'm going through your account. I see you've got XXX shares of this stock and YYY shares of that stock, and I'm wondering if perhaps we should move some to ZZZ mutual fund where I get paid a commission." (Well, he didn't say that last part, but it was obvious.)
I took the phone away from my ear and looked at it in confusion before putting it back. "Who are you?"
"I'm your broker and I just wanted to talk about ..."
He was clearly in my account because he knew what my holdings were. It was some dude who worked there. I sent him packing, and then I started getting his "personal Schwab newsletter", which went straight to my junk folder.
I have no idea why they suddenly assigned this guy to me, and I did not welcome his presence. Now I know that some dude that I've never met occasionally looks in my stock account, and I've considered moving away from Schwab as a result. [Reply]
Originally Posted by MagicHef:
Help them? Robinhood sold their shares at the extreme low today. 45 minutes later would have made a >$800,000 difference to this customer.
On average, I mean.
If someone really lost that much money, I think a lawsuit is in order. But I'd also wait to see what the stock price is a month from now before filing it.
That whole situation is messed up, plain and simple. [Reply]
Originally Posted by Rain Man:
On average, I mean.
If someone really lost that much money, I think a lawsuit is in order. But I'd also wait to see what the stock price is a month from now before filing it.
That whole situation is messed up, plain and simple.
Top of the hour news on the radio I'm listening to just said there are 2 lawsuits filed already against RH. It did not give any specifics. [Reply]
Originally Posted by jdubya:
Top of the hour news on the radio I'm listening to just said there are 2 lawsuits filed already against RH. It did not give any specifics.
It's gonna be interesting to see what fun has been lurking in their TOS this whole time. I'm guessing they didn't do this without their lawyers signing off on it (not that that makes it any better). [Reply]
Even if their TOS negate any potential lawsuits it feels like brand suicide. Seems other platforms halted buying temporary or set limitations but RH went all in. Add in the known connection to some of the players in this and they're taking the heat.
But I'm sure there's an investor class out there that isn't even paying attention to this or may not even care or want to pay their $75 transfer fee. [Reply]
Robinhood seems to have run low on credit due to this insane surge, and would have needed to go long on $X00M worth of GME. Way too risky given guaranteed eventual drop. So they shut it down.
"It’s been a tough day, and we’re grateful to you for being a Robinhood customer. In light of the extraordinary market conditions this week, we temporarily limited buying for certain securities this morning. Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
This was a temporary decision made to best continue serving you, and was not an easy one to make. We know it’s led to frustration and confusion, and wanted to provide some clarity.
As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
To be clear, this decision was not made on the direction of any market maker we route to or other market participants.
The past year in particular has shown us that the financial markets are for everyone—not just institutional investors and hedge funds. We’ve seen a new generation enter the market, and they’re sparking conversations about what it means to be an investor. We stand in support of you, our customers. Democratizing finance for all means giving more people access, not less.
We’ll keep monitoring market conditions and will update this Help Center article with the latest changes. We also published a blog post regarding today’s events.
Thank you again for being a Robinhood customer. We’re so grateful for your support.
Robinhood seems to have run low on credit due to this insane surge, and would have needed to go long on $X00M worth of GME. Way too risky given guaranteed eventual drop. So they shut it down.
