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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Qone0 who wrote (16562)	1/28/2021 8:11:38 PM
From: ajtj99	Read Replies (1) \| Respond to of 97492

A letter from a dentist has added weight with the DOJ?

To: Qone0 who wrote (16562)	1/29/2021 1:44:35 AM
From: bull_dozer	1 Recommendation Recommended By ajtj99 Respond to of 97492

>> This Robinhood thing is getting more interesting. Robinhood, in Need of Cash, Raises $1 Billion From Its Investors The no-fee trading app, which is popular with young investors, has been strained by the high volume of trading this week in stocks such as GameStop. Facing an onslaught of demands on its cash amid a stock market frenzy, Robinhood, the online trading app, said on Thursday that it was raising an infusion of more than $1 billion from its existing investors. Robinhood, one of the largest online brokerages, has grappled with an extraordinarily high volume of trading this week as individual investors have piled into stocks like GameStop. That activity has put a strain on Robinhood, which has to pay customers who are owed money from trades while posting additional cash to its clearing facility to insulate its trading partners from potential losses. On Thursday, Robinhood was forced to stop customers from buying a number of stocks like GameStop that were heavily traded this week. To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation. Robinhood still needed more cash quickly to ensure that it didn’t have to place further limits on customer trading, said two people briefed on the situation who insisted on remaining anonymous because the negotiations were confidential. nytimes.com

To: Qone0 who wrote (16562)	1/29/2021 9:13:48 AM
From: Sun Tzu	Read Replies (2) \| Respond to of 97492

Reading between the lines, a picture is emerging that Robinhood had liquidity problems meeting their obligations to the clearinghouse and that is why they banned trading on GME. On the "plus" side, this potentially saves them from some of the lawsuits and regulatory investigations. On the other hand, they've never came out straight claiming this. And they still wouldn't have the right to liquidate some of the positions that they did. To make matters worse, they got 40% of their funding from Citadel which lost a lot of money on the GME run up. A lawyer can play that as factor in the ban, especially to a jury. Anyways, one of the lessons I have learned is that the money you save in terms of commissions dealing with discount brokers is next to nothing compared to what you lose is good execution and not having to deal with this sort of shenanigans. With deep discount brokers, there is always something.