How was the volume of GME enough to cause this problem? Today was around 60 million. Aren't they usually executing billions of trades across the market every day?
If I understand it correctly, RH is making funds available for trading right away, rather than making users wait until T+2 to be able to reinvest those funds. They can't instantly unilaterally change their policies to make users wait until T+2 to reinvest those funds. If you jump into and out of a 10k USD position 5 times today, that eats into almost 50k of RH's collateral with clearing houses for the next 2 days. A very small number of stocks probably account for a vast vast majority of this rapid flipping on their platform, so preventing expanding positions in that small number of names gets rid of the vast majority of the problem. Also, the most volatile stocks have the highest margin requirements, doubly compounding the issues with GME trading.
Or, maybe I'm misunderstanding the issue. Maybe it's fully due to the higher clearing house margin requirements for the higher volatility stocks.
> Aren't they usually executing billions of trades across the market every day?
Clearing collateral requirements vary between 2 and 100%. That means $10bn of trades in one name can require the same amount of capital as $200mm of trades in another.
Or, maybe I'm misunderstanding the issue. Maybe it's fully due to the higher clearing house margin requirements for the higher volatility stocks.