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by dragontamer
1514 days ago
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Because there were more buyers than sellers within Robinhood. So when a RH user hit the buy button, RH couldn't find a seller within Robinhood and had to go to the clearinghouse to find other sellers. Robinhood maximized its buy orders to the clearinghouse (ran out of money), and that was it. RH couldn't afford finding sell-orders anymore. Game over. ------ Furthermore, the amount of money needed at the clearinghouse was clearly a burden to Robinhood. When they saw the bill, I'm sure they would have preferred for sell-orders to go to the clearinghouse (rather than internally), to unwind from DTCC. All stock brokers prefer trading "within" the system rather than seeking out 3rd party partners to find stocks / stock-buyers. Its cheaper and easier. |
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