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06-17-2020, 05:20 PM
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#2041
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Registered User
Join Date: Sep 2007
Location: Boston+Ocala
Posts: 23,658
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they took GNUS and XPSA apart today and will continue. Ford, Macy,GE, and other suspects that have a foot in the ground still great for shorts.
there are some cloud and data company's that are strong as hell and you have to stay away from shorting.
IBM may be the sleeper that is going to come to life within a year.
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06-17-2020, 08:05 PM
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#2042
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
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Quote:
Originally Posted by lamboguy
they took GNUS and XPSA apart today and will continue. Ford, Macy,GE, and other suspects that have a foot in the ground still great for shorts.
there are some cloud and data company's that are strong as hell and you have to stay away from shorting.
IBM may be the sleeper that is going to come to life within a year.
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Carnival announced soonest Cruise, October. Cruise lines got hammered.
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06-17-2020, 08:16 PM
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#2043
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Registered User
Join Date: Jan 2010
Posts: 2,176
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Quote:
Originally Posted by Suff
Ditto. In fact when speaking with the AVIS people I was told they are not back to even 15% of normal activity. Same with Spirit, yes they're packing the flights, but with less than 20% of routes actually flying. There I was told the same thing, we are ~15%, and that is on weekends. 10% during the week.
The people on the ground are senior people. You can imagine right? The people working are the critical managers that these companies don't want to lose. So I trust the numbers that I was hearing.
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Uh-oh, China limiting international flights out of Beijing due to a major new outbreaks. Market dropped as it was announced. There goes Xpress Spas?
__________________
One of the downsides of the Internet is that it allows like-minded people to form communities, and sometimes those communities are stupid.
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06-18-2020, 01:25 AM
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#2044
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Registered User
Join Date: Sep 2007
Location: Boston+Ocala
Posts: 23,658
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Quote:
Originally Posted by Suff
Carnival announced soonest Cruise, October. Cruise lines got hammered.
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i have a friend that has been building cruise ships for the past 3 years and the first one is going to be done by the end of july. his inaugural voyage was supposed to start at the end of August. his ship was booked solid and now its down to 5 cabins.
what he is going to do is give the trips away for free for the first responders from the northeast. he did the same thing for people that suffered and recovered from the Boston Marathon bombings.
its a very nice gesture, but i don't know if he will be able to fill up his ship even with a free trip.
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06-18-2020, 05:31 PM
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#2045
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Registered User
Join Date: May 2010
Posts: 2,021
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I get an inbox full of "free" cruises from the casino marketing departments (I played on a Royal Carib cruise years ago). They just started coming back for 2021, and the offers are aplenty.
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06-19-2020, 02:34 PM
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#2046
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
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In the red.
Quote:
Originally Posted by tbwinner
I get an inbox full of "free" cruises from the casino marketing departments (I played on a Royal Carib cruise years ago). They just started coming back for 2021, and the offers are aplenty.
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2:20 pm today. 9 cruise related stocks.
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06-19-2020, 03:03 PM
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#2047
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Registered User
Join Date: Sep 2007
Location: Boston+Ocala
Posts: 23,658
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if the s+P stays down today, it will be another failure on the upside. lets see if they can take down the markets next week.
big time volume today due to quad witching, and a major reshuffling of the S+P
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06-19-2020, 03:27 PM
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#2048
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
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Quote:
Originally Posted by lamboguy
big time volume today due to quad witching, and a major reshuffling of the S+P
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Expiring worthless today are my OSW $7.50 & 10 calls.
I have some june 26 that’s dead in the water likely.
The ULTA shorts have doubled , helps.
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06-19-2020, 10:32 PM
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#2049
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
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Good for the market Monday?
Trump just Friday night fired the US attorney in NYC.
He’s replacing him with Jay Clayton, the current chairman of the Securities and Exchange Commission.
Fwiw, its the guy who sent Michael Cohen to jail, and was leading the investigation into Rudy Giuliani.
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06-19-2020, 11:12 PM
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#2050
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Registered User
Join Date: Mar 2017
Posts: 1,032
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I am figuring with the Trump rally there should be a lot of news about second phase of the virus so the market will should go down on Monday.
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06-20-2020, 12:27 AM
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#2051
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
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Quote:
Originally Posted by oughtoh
I am figuring with the Trump rally there should be a lot of news about second phase of the virus so the market will should go down on Monday.
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Its pre-rally , Oklahoma cases are hockey stick & that + rally chatter, weighed the market this past week.
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06-20-2020, 02:40 AM
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#2052
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PA Steward
Join Date: Mar 2001
Location: Del Boca Vista
Posts: 88,183
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Quote:
Originally Posted by Suff
Good for the market Monday?
Trump just Friday night fired the US attorney in NYC.
He’s replacing him with Jay Clayton, the current chairman of the Securities and Exchange Commission.
Fwiw, its the guy who sent Michael Cohen to jail, and was leading the investigation into Rudy Giuliani.
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Cohen's already out.
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06-20-2020, 07:04 AM
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#2053
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Registered User
Join Date: Jan 2010
Posts: 2,176
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Quote:
Originally Posted by Suff
Expiring worthless today are my OSW $7.50 & 10 calls.
I have some june 26 that’s dead in the water likely.
The ULTA shorts have doubled , helps.
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Nice call on ULTA, no less than six WS analysts recently have them as a buy or positive rating. SUFF is the model of a contrarian.
__________________
One of the downsides of the Internet is that it allows like-minded people to form communities, and sometimes those communities are stupid.
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06-21-2020, 12:41 PM
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#2054
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Registered User
Join Date: Sep 2007
Location: Boston+Ocala
Posts: 23,658
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A Katusa Research Special Bulletin:
June 21, 2020
Robin Hood Trading Exposed: Steal from the Poor and Give to the Ultra Rich
By Marin Katusa
Tragedy struck fast.
On a sunny day earlier this June, a young college student jumped into an oncoming train.
The question he left in his suicide note wasn’t tied to any sort of extremist ideology.
Instead, he simply asked: “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?”
The answer?
Robinhood
Free Trading Services - Buyer Beware
It was touted as the trading platform set to level the playing field between the Wall Street one-percenters and the rest of the world. All thanks to its ease of access and nonexistent fees.
Robinhood has quickly become the go to trading platform for a generation of new investors, speculators and get rich quick fans.
In the wake of the COVID-19 outbreak, millions affected by the quarantines and the economic downturn flocked to open new accounts.
After spending five years getting to 10 million users, In the first quarter of 2020 alone Robinhood picked up an additional 3 million new users.
And this user base is exactly what it’s meant to be – young, inexperienced investors looking to get their feet wet in the markets.
The median age of a Robinhood user is 30 years old, and half of them have no investing experience whatsoever.
The average Robinhood account is worth about $2,000, versus the average E-Trade account at $69,230 and the average Morgan Stanley account at $900,000.
Unfortunately, Robinhood’s client base is exactly what it’s intended to be, they’re accomplishing the exact opposite.
Traditional brokerages and banking platforms often have extensive Know Your Client (KYC) guidelines in place.
This ensures that they know what their customers can handle when it comes to investing.
KYC guidelines help institutions understand what kind of investments are appropriate for their clients. And the kind of market access they should be allowed.
While Robinhood asks these same questions when you sign up for an account, it appears this may have been merely lip service. There’s no verification or follow-up on their end.
In other words…
College students can sign up for Robinhood accounts and get into options markets without really understanding what they’re doing.
It’s easy to blame the uneducated investors for playing with fire and getting burnt.
But at the end of the day the responsibility lies with Robinhood to ensure that their users are what they say they are.
It’s the same reason why you get your ID checked when you buy cigarettes or alcohol at the store. Selling alcohol to a minor means fines and jail time.
But there’s no need for Robinhood to do the same because there aren’t any penalties for them failing their KYC due diligence. And as long as that stays the case it’ll continue to be detrimental for them to do so.
After all, why would they not want their users to get access to high-risk investments they don’t understand, like options spreads? Even though trades on Robinhood are commission-free, they still make revenue from order flow – and that’s a whole other can of worms…
Zero Commission Does Not Mean Zero Cost
At the end of last year, Robinhood was fined $1.25 million by the Financial Industry Regulatory Authority (FINRA) for letting its brokers front run its order flow.
What does that mean?
How does Robinhood actually make money stealing from the poor to give to the rich?
When Robinhood receives orders from its users, it does not send those orders directly to a market exchange.
Instead, it sends them to 1 of 5 market maker firms, who then execute the trades on their behalf.
This forms Robinhood’s revenue model: these market making firms actually pay Robinhood for the privilege of executing their trades.
Now, Hold up a Minute – Let’s Think About This...
Why would a company pay to execute trades for someone?
Obviously, there has to be something in it for them, or else they’d be getting paid instead.
Well, when these companies receive order flow from Robinhood, they’re getting the best payment of all – information on future trades that will happen.
In other words, with this information in hand these companies can place trades of their own ahead of Robinhood users – also known as “frontrunning”.
Robinhood was fined for “failing to ensure that its customers received best prices for securities orders”.
Though they don’t directly admit fault, let’s look at the history of some of these brokers in question…
Citadel Securities receives over half of Robinhood’s total order flow. It was fined $22 million by the SEC in 2017 for misleading their clients about how they priced trades.
Wolverine Securities, who gets 15% of Robinhood’s orders, was fined $1 million in 2015 for failing to prevent insider trading.
These are the firms that pay Robinhood to place your trades. That’s how Robinhood can afford its “commission-free” business.
And as for that fine FINRA hit them with… what does a $1.25 million fine even mean to a company valued at $8 billion?
Never forget, there’s no such thing as a free lunch.
Don’t Feed Robin Hood or His Merry Men
There’s no denying that Robinhood has taken off spectacularly ever since the pandemic outbreak.
However, don’t make the mistake of tying the recent run-up in the markets to retail traders on the Robinhood platform like some have.
To see how much impact Robinhood has on the overall markets we can turn look at the Assets Under Management (AUM) behind the wheel of this machine.
In total, Robinhood has an estimated $30 billion in assets under management across all its users.
The U.S. equities market, in contrast, sees an average of $325 billion in dollar volume traded on its exchanges every day.
If Robinhood were somehow halted or shut down, it’s unlikely that would cause a “Black Swan” type event that would trigger a collapse in the markets.
And more to the point, I doubt that’ll happen anytime soon. FINRA basically slapped them on the wrist just last December.
There are plenty of other trading platforms and brokerages out there that provide excellent market access and competitive fee structures.
Still, there’s no denying that Robinhood provides an easily accessible platform whose pricing is unmatched.
I Trade With Robinhood, How Do I Protect Myself?
So, if you already trade on Robinhood, or don’t have access to any other trade platforms, what can you do to minimize your risk?
Two ways…
1. Don’t place market orders. Place limit orders only.
By placing limit orders, which only execute once the security reaches a specific price, you are removing Robinhood’s brokers’ ability to “frontrun” you – i.e. give you a worse price.
After all, they can’t give you a worse price if you tell them exactly what price you want to pay. And really, as an alligator investor, you should never be placing market orders anyway.
2. Do your due diligence, and make sure you understand each trade before you place it.
This goes double for any trade that involves options or other derivatives.
This brings us back to the young college student who committed suicide, because he found himself $730,000 in debt on his Robinhood account.
As it turns out, it’s probable that he was never actually in that much debt.
With the put spread the student was trading that he said “should have cancelled out” in his suicide note, what may have happened is that his options were exercised without the underlying securities assigned to his account.
Options trades take one day to settle. In other words, our student might have seen the debit that resulted from the exercise of the puts he sold without seeing the actual stock in his holdings, due to this delay.
A user interface error on Robinhood’s part, perhaps. But one that cost a young man his life.
There’s enough to worry about in the world right now without adding your investments into the mix.
Stay educated – and stay safe.
Regards,
Marin
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06-21-2020, 01:21 PM
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#2055
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Beat up 💪
Join Date: Jun 2002
Location: Beach life in Fort Lauderdale
Posts: 11,938
|
Quote:
Originally Posted by lamboguy
A Katusa Research Special Bulletin:
June 21, 2020
Robin Hood Trading Exposed: Steal from the Poor and Give to the Ultra Rich
By Marin Katusa
Tragedy struck fast.
On a sunny day earlier this June, a young college student jumped into an oncoming train.
The question he left in his suicide note wasn’t tied to any sort of extremist ideology.
Instead, he simply asked: “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?”
The answer?
Robinhood
Free Trading Services - Buyer Beware
It was touted as the trading platform set to level the playing field between the Wall Street one-percenters and the rest of the world. All thanks to its ease of access and nonexistent fees.
Robinhood has quickly become the go to trading platform for a generation of new investors, speculators and get rich quick fans.
In the wake of the COVID-19 outbreak, millions affected by the quarantines and the economic downturn flocked to open new accounts.
After spending five years getting to 10 million users, In the first quarter of 2020 alone Robinhood picked up an additional 3 million new users.
And this user base is exactly what it’s meant to be – young, inexperienced investors looking to get their feet wet in the markets.
The median age of a Robinhood user is 30 years old, and half of them have no investing experience whatsoever.
The average Robinhood account is worth about $2,000, versus the average E-Trade account at $69,230 and the average Morgan Stanley account at $900,000.
Unfortunately, Robinhood’s client base is exactly what it’s intended to be, they’re accomplishing the exact opposite.
Traditional brokerages and banking platforms often have extensive Know Your Client (KYC) guidelines in place.
This ensures that they know what their customers can handle when it comes to investing.
KYC guidelines help institutions understand what kind of investments are appropriate for their clients. And the kind of market access they should be allowed.
While Robinhood asks these same questions when you sign up for an account, it appears this may have been merely lip service. There’s no verification or follow-up on their end.
In other words…
College students can sign up for Robinhood accounts and get into options markets without really understanding what they’re doing.
It’s easy to blame the uneducated investors for playing with fire and getting burnt.
But at the end of the day the responsibility lies with Robinhood to ensure that their users are what they say they are.
It’s the same reason why you get your ID checked when you buy cigarettes or alcohol at the store. Selling alcohol to a minor means fines and jail time.
But there’s no need for Robinhood to do the same because there aren’t any penalties for them failing their KYC due diligence. And as long as that stays the case it’ll continue to be detrimental for them to do so.
After all, why would they not want their users to get access to high-risk investments they don’t understand, like options spreads? Even though trades on Robinhood are commission-free, they still make revenue from order flow – and that’s a whole other can of worms…
Zero Commission Does Not Mean Zero Cost
At the end of last year, Robinhood was fined $1.25 million by the Financial Industry Regulatory Authority (FINRA) for letting its brokers front run its order flow.
What does that mean?
How does Robinhood actually make money stealing from the poor to give to the rich?
When Robinhood receives orders from its users, it does not send those orders directly to a market exchange.
Instead, it sends them to 1 of 5 market maker firms, who then execute the trades on their behalf.
This forms Robinhood’s revenue model: these market making firms actually pay Robinhood for the privilege of executing their trades.
Now, Hold up a Minute – Let’s Think About This...
Why would a company pay to execute trades for someone?
Obviously, there has to be something in it for them, or else they’d be getting paid instead.
Well, when these companies receive order flow from Robinhood, they’re getting the best payment of all – information on future trades that will happen.
In other words, with this information in hand these companies can place trades of their own ahead of Robinhood users – also known as “frontrunning”.
Robinhood was fined for “failing to ensure that its customers received best prices for securities orders”.
Though they don’t directly admit fault, let’s look at the history of some of these brokers in question…
Citadel Securities receives over half of Robinhood’s total order flow. It was fined $22 million by the SEC in 2017 for misleading their clients about how they priced trades.
Wolverine Securities, who gets 15% of Robinhood’s orders, was fined $1 million in 2015 for failing to prevent insider trading.
These are the firms that pay Robinhood to place your trades. That’s how Robinhood can afford its “commission-free” business.
And as for that fine FINRA hit them with… what does a $1.25 million fine even mean to a company valued at $8 billion?
Never forget, there’s no such thing as a free lunch.
Don’t Feed Robin Hood or His Merry Men
There’s no denying that Robinhood has taken off spectacularly ever since the pandemic outbreak.
However, don’t make the mistake of tying the recent run-up in the markets to retail traders on the Robinhood platform like some have.
To see how much impact Robinhood has on the overall markets we can turn look at the Assets Under Management (AUM) behind the wheel of this machine.
In total, Robinhood has an estimated $30 billion in assets under management across all its users.
The U.S. equities market, in contrast, sees an average of $325 billion in dollar volume traded on its exchanges every day.
If Robinhood were somehow halted or shut down, it’s unlikely that would cause a “Black Swan” type event that would trigger a collapse in the markets.
And more to the point, I doubt that’ll happen anytime soon. FINRA basically slapped them on the wrist just last December.
There are plenty of other trading platforms and brokerages out there that provide excellent market access and competitive fee structures.
Still, there’s no denying that Robinhood provides an easily accessible platform whose pricing is unmatched.
I Trade With Robinhood, How Do I Protect Myself?
So, if you already trade on Robinhood, or don’t have access to any other trade platforms, what can you do to minimize your risk?
Two ways…
1. Don’t place market orders. Place limit orders only.
By placing limit orders, which only execute once the security reaches a specific price, you are removing Robinhood’s brokers’ ability to “frontrun” you – i.e. give you a worse price.
After all, they can’t give you a worse price if you tell them exactly what price you want to pay. And really, as an alligator investor, you should never be placing market orders anyway.
2. Do your due diligence, and make sure you understand each trade before you place it.
This goes double for any trade that involves options or other derivatives.
This brings us back to the young college student who committed suicide, because he found himself $730,000 in debt on his Robinhood account.
As it turns out, it’s probable that he was never actually in that much debt.
With the put spread the student was trading that he said “should have cancelled out” in his suicide note, what may have happened is that his options were exercised without the underlying securities assigned to his account.
Options trades take one day to settle. In other words, our student might have seen the debit that resulted from the exercise of the puts he sold without seeing the actual stock in his holdings, due to this delay.
A user interface error on Robinhood’s part, perhaps. But one that cost a young man his life.
There’s enough to worry about in the world right now without adding your investments into the mix.
Stay educated – and stay safe.
Regards,
Marin
|
However, don’t make the mistake of tying the recent run-up in the markets to retail traders on the Robinhood platform like some have.
To see how much impact Robinhood has on the overall markets we can turn look at the Assets Under Management (AUM) behind the wheel of this machine.
In total, Robinhood has an estimated $30 billion in assets under management across all its users.
The U.S. equities market, in contrast, sees an average of $325 billion in dollar volume traded on its exchanges every day.
If Robinhood were somehow halted or shut down, it’s unlikely that would cause a “Black Swan” type event that would trigger a collapse in the markets.
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