Also typical that they're auto-closing positions at the literal lowest point possible today. I am seriously struggling to understand how this can be even remotely legal. It's amazing.
But their hedge fund customers only care about them because they sell their trading book info so their algorithmic trading algorithms can make tiny amounts of profit right before those trades execute. If they have no trading book to offer those hedge funds because all the retail traders leave the app, they have no revenue stream whatsoever and their hedge fund clients will drop them like a rock.
I'm not sure they even care that much - they had a huge leap year bug in 2016 that resulted in an outage. 4 years later, in 2020, they had the exact same bug. 4 years to fix it and they didn't, so I'm wondering if they even expected to last this long.
Maybe they'll end up closing shop and starting a new company with a new shitty app, perhaps even with the same codebase.
Just because it's in a T&Cs agreement doesn't mean it's legal. This definitely breaks "good faith" in your brokerage and if inclined a court could still go after them. Granted this is the United States of America, and I think it's more than likely the courts do no such thing and just find it fully legal.
EDIT: Also, looks like since these weren't margin or discretionary accounts I don't know how RH will say it's legal, per here.
Yeah agreed. If this was all margin stuff then I get it, I'd be closing out anybody who was trading GME with my own money too. Regular retail holdings being auto-sold? lol bonk you're going to jail (except not really because we'll never jail bankers unless they're Asian)
Also typical that they're auto-closing positions at the literal lowest point possible today. I am seriously struggling to understand how this can be even remotely legal. It's amazing.
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robinhood the company is definitely dead
But their hedge fund customers only care about them because they sell their trading book info so their algorithmic trading algorithms can make tiny amounts of profit right before those trades execute. If they have no trading book to offer those hedge funds because all the retail traders leave the app, they have no revenue stream whatsoever and their hedge fund clients will drop them like a rock.
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then they would've lost their biggest customer
the real victory today was robinhood getting crushed by charybdis after dodging scylla
but your analysis is right. losing citadel is nowhere near as existential as losing your product* (ty sysgen)
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I'm not sure they even care that much - they had a huge leap year bug in 2016 that resulted in an outage. 4 years later, in 2020, they had the exact same bug. 4 years to fix it and they didn't, so I'm wondering if they even expected to last this long.
Maybe they'll end up closing shop and starting a new company with a new shitty app, perhaps even with the same codebase.
It will be called Tradr and be somehow worse
Robinhood only makes money from interest and selling order streams to Citadel. They don't really make money from retail users.
retail users are their product. they don't have anything to sell citadel w/o them
True. They were between a rock and a hard place. I guess getting of Citadel might have been better long term.
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Totally legal. Questionable but legal. It’s in any brokerages t&cs
Just because it's in a T&Cs agreement doesn't mean it's legal. This definitely breaks "good faith" in your brokerage and if inclined a court could still go after them. Granted this is the United States of America, and I think it's more than likely the courts do no such thing and just find it fully legal.
EDIT: Also, looks like since these weren't margin or discretionary accounts I don't know how RH will say it's legal, per here.
Oh shit? Not margin accounts? Yeah, super questionable legality in that case
It would be different if it was naked options or something
Yeah agreed. If this was all margin stuff then I get it, I'd be closing out anybody who was trading GME with my own money too. Regular retail holdings being auto-sold? lol bonk you're going to jail (except not really because we'll never jail bankers unless they're Asian)