LogFAQs > #950087570

crayola555 posted...

We're not even talking about the collateral here. The article you linked me to stated Robinhood has it's own clearinghouse similar to a few other brokerages. RH is the only one that imposed restrictions on their stocks, none of the others had any.

1. Robinhood is a tiny fucking company compared to people like Merrill Lynch. They don't have 1/10th the capital or liquid of people who've been in the business for decades.
2. Robinhood has their own clearing house but not everyone uses Robinhood so if you'd trading with someone there's a chance it has to go through multiple clearing houses.
3. When that happens, it's cleared through a company known as the DTCC who has a literal monopoly (>95%) on clearing transactions like these.
4. The DTCC "surprise changed" collateral requirements from 1-3% to 100%
5. Because RH marketed itself as retailer friendly, many retailers were there filing disproportionate buys on RH who did not have the cash to handle the collateral imposed by the DTCC.
6. In theory sugar and rainbows universes if everyone trading was doing this on Robinhood this wouldn't have happened.
7. However as the goal was to intentionally take from hedgefunds, buys were targeting stocks not traded through Robinhood. Sticking Robinhood with the brunt of collateral overhead.

So you see the little guy is getting fucked here because of a quadrillion dollar clearing house but it's important to understand the perspective here that compared to people like Citadel, DTCC, and others, Robinhood is ALSO the little guy and they are more than happy to throw Robinhood under the bus to profit themselves which is what's happening now. Robinhood tanking doesn't hurt them, it hurts us and it hurts Robinhood.

So your anger is misplaced. It should be directed at Melvin Capital, Citadel, Ken Griffin, Steven Cohen, and the DTCC.

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It says right here in Matthew 16:4 "Jesus doth not need a giant Mecha."
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