The clearing firms (Depository Trust & Clearing Corporation, etc.) are the monopolistic organizations controlling the ability for brokers to be ABLE to exchange stocks. They are asking for short term bridge loans to make up for money that they know they cannot get from Melvin Capital for these trades. They are the arbiters of the cost of clearing these stocks, and that cost is supposedly passed onto the brokerage firms such as RobinHood. Right now, the clearing cost is 100%, and that price is set by the clearing firm. If you sold a GameStop share RIGHT NOW, you would not get ANY money. They control the risk. They are the ones stopping everyone from trading for the "stability of the market".
There is a more nuanced position on the broker's end, and even though RobinHood may be tangentially related to Melvin Capital it doesn't necessarily prove guilt. The clearing firm's sole arbitration is the current reason that no one can trade GME.
This actually corresponds EXACTLY with what the CEO of Robinhood has said to interviewers in the past few hours. " “Robinhood, as a brokerage, has financial requirements including … deposits that we have to make to various clearinghouses. Some of these requirements fluctuate based on volatility in the markets,” said Tenev. " (https://www.coindesk.com/robinhood-ceo-protect-firm-limit-buy-orders)
Robinhood has no control over whether or not you are allowed to make money when you trade a stock, but they DO become liable when you do trade a stock and make NO MONEY from it. They are the cashier at the Walmart customer service counter that every angry person is desperately trying to renegotiate the deals they've made. Clearing houses require a 100% holdings rate for the trading of these stocks. Currently, with money being traded in the hundreds of billions for GME, that means an identical set of hundreds of billions are required to be lent to the clearing house for 2 days ensure the trade.
From what I can tell, Robinhood isn't the bad guy here. We need to spread this information. Clearing houses such as DTCC are currently the monopolistic arbitration providers on stock exchange, and THEY ARE THE ONES THAT HAVE STOPPED ALL SALES.
The clearing firms (Depository Trust & Clearing Corporation, etc.) are the monopolistic organizations controlling the ability for brokers to be ABLE to exchange stocks. They are asking for short term bridge loans to make up for money that they know they cannot get from Melvin Capital for these trades. They are the arbiters of the cost of clearing these stocks, and that cost is supposedly passed onto the brokerage firms such as RobinHood. Right now, the clearing cost is 100%, and that price is set by the clearing firm. If you sold a GameStop share RIGHT NOW, you would not get ANY money. They control the risk. They are the ones stopping everyone from trading for the "stability of the market".
There is a more nuanced position on the broker's end, and even though RobinHood may be tangentially related to Melvin Capital it doesn't necessarily prove guilt. The clearing firm's sole arbitration is the current reason that no one can trade GME.
This actually corresponds EXACTLY with what the CEO of Robinhood has said to interviewers in the past few hours. " “Robinhood, as a brokerage, has financial requirements including … deposits that we have to make to various clearinghouses. Some of these requirements fluctuate based on volatility in the markets,” said Tenev. " (https://www.coindesk.com/robinhood-ceo-protect-firm-limit-buy-orders)
Robinhood has no control over whether or not you are allowed to make money when you trade a stock, but they DO become liable when you do trade a stock and make NO MONEY from it. They are the cashier at the Walmart customer service counter that every angry person is desperately trying to renegotiate the deals they've made. Clearing houses require a 100% holdings rate for the trading of these stocks. Currently, with money being traded in the hundreds of billions for GME, that means an identical set of hundreds of billions are required to be lent to the clearing house for 2 days ensure the trade.
From what I can tell, Robinhood isn't the bad guy here. We need to spread this information. Clearing houses such as DTCC are currently the monopolistic arbitration providers on stock exchange, and THEY ARE THE ONES THAT HAVE STOPPED ALL SALES.