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by hardwaresofton 1967 days ago
The news did not cover the nature of the limitations, they just said limitations. I called TD early in the day and the limitations were not about buying stock but rather about selling ("shorting" options), and buying/selling spreads (a combination of options with interesting characeristics).

There are two classes of broker here -- brokers that are backed by Citadel, and Brokers that have a different market maker/clearing house and/or are not exposed to Citadel. The WeBull CEO did an interview mid-day and noted that certain market makers and institutions (i.e. citadel and/or Robinhood) were calling banks for bridge loans in the middle of the day. He also mentioned that Melvin Capital was bankrupt. I think Citron got out (that's a different story) a couple days ago or so.
1 comments
wocram 1967 days ago
This is not true, Citadel is the largest market maker and is in fact TDA's largest broker. This is abundantly clear in 606 disclosures.

TDA: https://www.tdameritrade.com/retail-en_us/resources/606_disc... from https://www.tdameritrade.com/disclosure.page

Webull: http://public.s3.com/rule606/webull/606-BULL-2019Q4.pdf from https://pic.webull.com/PDFs/Disclosure%20of%20Payment%20for%... / http://public.s3.com/rule606/webull/

Robinhood: https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%2... from https://robinhood.com/us/en/about/legal/

Fidelity: https://clearingcustody.fidelity.com/app/literature/item/990... from https://clearingcustody.fidelity.com/app/item/RD_13569_21696...

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hardwaresofton 1967 days ago
I stand corrected -- thank you for clearing this up, this completely explains it.

It does not explain why Fidelity allowed purchasing the stock however though, which means I was likely wrong about the link altogether. Thanks for pointing that out.

[EDIT] - Is it reasonable to assume that maybe TD and Fidelity have a venue that the others do not have and that's the reason? When I compare RH, WeBull, Fidelity and TD I see UBS Securities, LLC as the standout difference.

Was UBS choosing to route the orders (I guess they have none of the shorts on their books? or they properly managed their risk?) while the others didn't touch it?

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wocram 1966 days ago
It looks like the prevailing explanation is that DTCC increased collateral requirements and some brokers couldn't handle that.

https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...

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