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by ZephyrBlu 1967 days ago
Sorry, what? I can't tell if you're serious.

Robinhood didn't get extorted, their clearinghouse told them they needed more capital to secure further $GME trades, because the volatility has been off the charts.

Vlad even states this in the article!

> Clearinghouse deposit requirements skyrocketed overnight

...

> The clearinghouse deposit requirements are designed to mitigate risk
1 comments
unethical_ban 1967 days ago
I think the point is, the effect of that sudden change was the screwing over of retail investors at the expense of funds and firms that weren't locked out. And that RH should have seen this coming if it were all "by the book". And how the hell can those fees go up so instantly?

If we're going to be all "free market" about how only the strong survive, RH should be eliminated.

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ZephyrBlu 1967 days ago
It _was_ by the book and they _should_ have seen it coming.

"How do clearinghouses determine how much is required?

It’s pretty technical, but the process basically works as follows: clearinghouses look at a firm’s customer holdings as a portfolio. They use a volatility multiplier, looking at specific stocks, to quantify their risk. The clearinghouse may assign significant additional charges based on how much of one stock a firm’s customers hold. If a firm’s customers have more buy than sell orders, and the securities they’re buying are more volatile, the deposit requirement will be higher. Clearinghouses can also require additional deposits if certain thresholds are met."

https://www.streetinsider.com/Corporate+News/Robinhood+Blame...

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unethical_ban 1967 days ago
Do you agree, then, that RH should be punished, if not dismembered as an entity, for incompetence leading to billions in stock losses?
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myWindoonn 1967 days ago
This is the same fallacious argument that media cartels use to claim that copyright infringement "costs" them and incurs "losses". No, this is unrealized revenue, and that's generally not punishable by law; there have to be specific circumstances which would indicate fraudulent behavior.

RH is trying their best to stay afloat and carry out their fiduciary duty, and it seems that the incompetence is not with RH but with the many users who misunderstood how RH works.

(To be clear, we should dismember the entire system of short-selling shares of corporations, for the billions of dollars worth of damages and injuries which are done to the employees of those corporations and the social fabric. But that is not the same as revoking RH's charter.)

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Spivak 1967 days ago
If RH is eventually found to have stopped trading on GME in purpose to manipulate the price then sure let the SEC draw and quarter them. But RH wouldn't be so severely punished for having downtime and this is basically that.
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