A big reason to stick with brokers run by and for real traders and industry types, and stay far away from those run by tech bro "disruptors". Poor risk controls and clueless customers means that a flash crash or black swan type event can put the whole business at risk.
Yeah, this really shouldn't be considered his fault. Yes, he was glue eating retarded but regardless his extra chromosome shouldn't be taken into account. The Robinhood risk department (if it even exists) should be canned and Robinhood should have to eat this. I'd love to be a fly on the wall in arbitration when they ask "why did your risk department think this was ok?"
RH violated SEC regs in allowing this in a cash account. I wouldn't have a penny over SIPC limits in this fvcking joke.
Can't agree more. This business is not where you want to expose yourself to additional credit and liquidity risk through your broker just because employees there have no friggin clue and let customers do anything.
That’s why I think it’s a fake story. 5k cash account trading 250k notional equiv of a zero coupon bond and the guy thinks he’ll earn 50k? And then this guy claims to withdraw 10k when he has only 5k of equity! And then the margin call costs him 50k? He’s still delta nuetral. So he lost 20percent between the strikes on bid offer?
I look at the entire thread on Reddit and tried to compare the alleged trades to time and sales and it appears to be fiction
Bunch of trades on 1/10/19. OI on everything but the 10 calls jumped close to 500. 1/9: underlier expiry strike right OI UVXY 20210115 10 C 67 UVXY 20210115 15 C 154 UVXY 20210115 10 P 276 UVXY 20210115 15 P 103 1/10: UVXY 20210115 10 C 233 UVXY 20210115 15 C 620 UVXY 20210115 10 P 709 UVXY 20210115 15 P 560 I couldn't find anything about that. Got a link?