Robinhood Blog

That was their second post of the day. Their first post [1] made no mention of liquidity or clearinghouse deposit requirements, but rather framed the decision entirely in terms of "helping" customers deal with volatility. That post was at best misleading. [1] https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…

They've posted a response, for what it is worth: https://blog.robinhood.com/news/2018/12/14/a-letter-from-our-founders Not exactly confidence-inspiring, but we will see.

Their page [0] on the new product still mentions both SIPC and FDIC in numerous places. If I wasn't following this news, the clear implication I'd get is that my account was both FDIC and SIPC insured. This is really irresponsible of Robinhood. [0] https://blog.robinhood.com/news/2018/12/13/introducing-robinhood-check…

Nope. I'm curious about the clearinghouses (DTCC). Robinhood explains the general process in a post from 4 days ago [1]. It would be great to see more details for the DTCC's increase in the amount of required collateral. I tried Googling for some info but didn't find much (probably haven't tried hard enough yet) ex [2]. Naively, what we saw was a failure of the financial system to support trades. It may not be Robinhood, but it may not necessarily be T+2 either. Is there a website I can use to query the current deposit requirements for GME? Is it public info? Are there details provided for factors affecting that amount that can be compared across different stocks? I'm a total noob please forgive my noob curiosities :) [1]: https://blog.robinhood.com/news/2021/1/29/what-happened-this-week [2]: https://dtcclearning.com/products-and-services/settlement/settlement-s…

"Well they sell your trade data to HFT firms before a trade is executed " Is this actually true? If so it blows me away this this is not illegal, or that the press hasn't destroyed them for it. RobinHood is has one of the most ridiculous branding efforts ever: 'borne of the Occupy Wall Street' movement, the idea was to empower Millennials to 'break the system' ... by 'buying into the system'??? It's like the perfect script written by a NY agency for a bank to re-position the exact same financial products under the banner of a ridiculous 'empowerment branding', like Exxon creating a hipster brand to sell 'clean oil'. "Robinhood Raises $323M to Democratize Finance For All" [1]. "Trading app tries to fix a 'rigged' financial system" [2] from CNN. How does a startup get major news agencies to consistently promote their narratives unchallenged, especially when they're so ridiculous? We saw this a lot with WeWork as well. I can't figure out is how the press, particularly CNN bought into hook-line and sinker especially early on. They've been consistently promoting Robin Hood and their 'empowering message' with fluff stories, not remotely critical of the materiality of the business. Have a look [3] Recently, they've started to question some things, and perhaps the press will fall out of love with them and it'll be narrative in the other direction. There is absolutely something amiss here, if anyone with deep relationships in the PR and story placement care to comment, it…

>Except robinhood suffers major security breaches (eg Nov 21) I went to search that up and got >the unauthorized party obtained a list of email addresses for approximately five million people, as well as full names for a different group of approximately two million people. We’ve determined that several thousand entries in the list contain phone numbers https://blog.robinhood.com/news/2021/11/8/data-security-incident I'm not trying to say the incident is okay, but calling a leaked email/name list a "major" breach is a stretch.

There was a Robinhood breach a while back - https://blog.robinhood.com/news/2021/11/8/data-security-incident

https://blog.robinhood.com/news/2018/10/9/introducing-clearing-by-robi… Robinhood has been self clearing for years before the GME incident

They say otherwise on their blog[1]: "Clearinghouses are SEC-registered organizations that act as the central depository for securities. They keep a record of the stocks owned through a brokerage. Clearing brokerages, like Robinhood Securities, are members of clearinghouses." "The amount required by clearinghouses to cover the settlement period of some securities rose tremendously this week. How much? To put it in perspective, this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten-fold." https://blog.robinhood.com/news/2021/1/29/what-happened-this-week

Robinhoof at least seem to agree lol: https://blog.robinhood.com/news/2021/2/2/its-time-for-real-time-settle…

The link should probably be changed to this: https://blog.robinhood.com/news/2021/2/2/its-time-for-real-time-settle…

Edit window expired on the above comment. Robinhood is solving for capitalization with an equity raise [1] [2]. [1] https://blog.robinhood.com/news/2021/2/1/robinhood-raises-34-billion-t… (Robinhood Raises $3.4 Billion to Fuel Record Customer Growth) [2] https://news.ycombinator.com/item?id=25990453 (HN: Robinhood raises another $2.4B from shareholders)

They did: https://blog.robinhood.com/news/2021/1/29/what-happened-this-week

https://blog.robinhood.com/news/2021/1/29/what-happened-this-week Straight from the horse’s mouth

I really don't know what all the fuss is about. Robinhood decided to halt trading on a number of stocks due to uncommon volatility, just for a day, so they can assess the matter. [0] And as is common practice in the trading world... when a market is closed, you are still allowed to close your position. Which means that you are allowed to sell, and not buy. (If robinhood allowed for true shorting then people could still technically buy by closing their short positions as well.) It's not some huge conspiracy to keep the price down for the little guy. It's actually a fairly common practice in financial exchanges around the world. [0] https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili…

Their interface is just laughably, inexcusably bad. The stock price charts don't even have labels on the y-axis! No really, check it out! https://blog.robinhood.com/news/2017/10/31/robinhood-now-on-web

It’s in their blog. https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili…

What you're saying may be true. But then I don't know why Robinhood wouldn't say that in their first statement addressing why they disabled buying [1]. [1]: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…

Yeah, you're right. I think this article lacks specifics, but they did mention capital requirements. I was referring to their previous blog entry: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t… In addition, their founder @VLAD on Twitter cited misinformation as a reason. As for conspiracy, I'd venture to guess that inconsistencies/hypocrisies and opacity turned people into cynics. I'm not saying RH is hypocritical, by the way. Instead, the hypocrisies of other platforms made people trust RH less. For instance, I saw numerous accusations that RH was helping wall street by limiting buying but not selling.

They have. There is no silence. They made a blog post saying pretty much exactly this: https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili… - they had capital and deposit obligations which they couldn't meet due to volatility, but having sorted this out they can resume trding.

Robinhood is its own clearing system. https://blog.robinhood.com/news/2018/10/9/introducing-clearing-by-robi… https://www.cnbc.com/2021/01/28/robinhood-interactive-brokers-restrict…

They did: https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili… But the conspiracy theories are more fun, so nobody really paid attention.

Robinhood Instant is not the same thing as a margin account. You're thinking of Robinhood Gold. FINRA rules say you can't open a margin account with less than $2k. Margin investing is offered to eligible customers through Robinhood Gold, a suite of premium investing products including Nasdaq Level 2 market data and Morningstar Research Reports, for only $5 a month. The first $1,000 of margin is included in the $5 monthly fee. After that, customers pay a flat 2.5% yearly interest rate on any amount used above $1,000. Our pricing is straightforward and the same for every eligible customer, regardless of their account size. https://blog.robinhood.com/news/2020/12/21/robinhood-lowers-margin-int…

Their first statement was nothing like that [1]. Why do we choose to believe the second thing over the first thing? Because it makes them look better? 1. https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…

Robinhood has announced this restriction on their blog here: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t… . > We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities.

Justin's "tip" was incorrect and he's spreading disinformation. "To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to." - Robinhood[0] [0]https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili…

FWIW, Robinhood posted a statement on their blog[1]. Two snippets: >In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. Also: >We fundamentally believe that everyone should have access to financial markets. Cognitive dissonance to the hilt :) [1]https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…

> Robinhood was one of many brokerages to implement trading restrictions. e.g. Bank of America/Merrill Edge also shut down buy orders for GME. Citadel does not have the same relationship with these other brokerages. So, to say Robinhood made their decision based on a conflict of interest doesn't hold water. My issue is those brokerages said they were closing orders because of Apex clearing. Robinhood basically said that they chose to do it themselves: https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…

I don't think they use Apex anymore. https://blog.robinhood.com/news/2018/10/9/introducing-clearing-by-robi…

This is mostly covered in, or is a rehash of, the blog post (well, PR spiel) released earlier today: https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatili… They also released one a few hours before that [1], re the restrictions imposed on trading in certain stocks. The post didn't seem to prevent the backlash. [1] https://blog.robinhood.com/news/2021/1/28/keeping-customers-informed-t…