Robinhood Blog

"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…

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-services/risk-management/297-participants-fund/2181-how-your-participants-fund-deposit-is-calculated.html

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-volatility

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-interest-rate

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-through-market-volatility. 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 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