Robinhood

[Burgerwars]

On 11/5/2019 at 1:38 PM, hegemony said:

HAHAHAHAHAHAHA

 

Robinhood Traders Discovered a Glitch That Gave Them ‘Infinite Leverage’

The jig is up. Robinhood closed the loophole. A group of immature Reddit users bragged about how big of a position they created doing this (constantly selling covered calls that were mistakenly added to their account's buying power to buy more stock and to sell more covered calls). I'm sure unwinding this huge position can create big losses if the stock drops big time. If it rises above the call price, you use the stock to cover your calls but you still keep whatever cash you have left in the account from writing the calls.

Anyway all of this violates margin requirements. 

[aroberson]

On 11/7/2019 at 7:54 PM, Burgerwars said:

The jig is up. Robinhood closed the loophole. A group of immature Reddit users bragged about how big of a position they created doing this (constantly selling covered calls that were mistakenly added to their account's buying power to buy more stock and to sell more covered calls). I'm sure unwinding this huge position can create big losses if the stock drops big time. If it rises above the call price, you use the stock to cover your calls but you still keep whatever cash you have left in the account from writing the calls.

Anyway all of this violates margin requirements. 

Waiting for the lawsuits, when Robinhood tries to get all that money back lol

[hegemony]

More than 10 million people now have accounts on Robinhood

[cv91915]

23 hours ago, hegemony said:

More than 10 million people now have accounts on Robinhood

With combined balances approaching $2,050.

[Burgerwars]

23 hours ago, cv91915 said:

With combined balances approaching $2,050.

Agree.  Their business model encourages every millennial burger flipper to open an account on their app, but unless they disclose figures to help indicate median account balances, I'll make a guess the figure is about $50, which is worthless to other brokerages.

I don't normally publish what I have in an account, but I will say my Robinhood account is about twice as much as figure you mentioned above, so they do have more than $2,050.  It's basically some ETFs. There's really no need for me to keep them at Robinhood, but I'll leave them there for now.

 

[hegemony]

Robinhood drops plan to start a bank; brokerage clients still waiting for interest on cash