New York (CNN Business) – The revolution of bursatil -o-trading- free Robinhood bargaining helped alleviate the rumble of the recent Wall Street chaos with GameStop actions and other impetus from Reddit.
Robinhood’s eye means that the ability to buy actions, by capriciousness, is now in full swing. Robinhood has a larger inversion and las masas.
Rival line corridors are required to imitate Robinhood’s commercial business model, and some union will be solely for the sake of completeness.
Behind the slides in which sophisticated commercial strategies, such as options trading and appraisal, stand up to Wall Street risks. Free trading, along with the Reddit messaging forums, has leveled the game camp, for good or for bad.
“It’s producing a cambio culture,” said Vlad Tenev, executive director and co-founder of Robinhood, at CNN Business, and an interview conducted just before the Reddit turbo unites to send GameStop, AMC and other lunar actions. (Robinhood revisits the following questions about the Reddit phenomenon).
“There is a large group of people who think that investing in something is a series only for those who use a front door to a terminal,” said Tenev, a nation in Bulgaria of the Soviet era. “This is the hereditary school of thought.”
WallStreetBets has a good añicos esa noción.
‘Access is the most important part’
The Reddit community has co-financed worldwide funding to unveil epic letters that are being leaked to the covert and fundraising funds. GameStop cannot lose more than 1,500% of this amount.
The Redditors are centered on companies that are popular among the sellers in short, which have a clear action to take on the actions and sales, with the hope of being able to compare to a very low price and embolize the difference. The sales in short are extremely risky, in theory, the losses are infinite.
Nothing in this series is possible without free trading and access to a well-earned money, which amplifies the losses.
“Access is the most important part: easy, free and available,” said Jaime Rogozinski, who founded WallStreetBets nine years ago, and Julia Chatterley of CNN Business el jueves. «Pueden can instantly enter and participate and start using these sophisticated cleaning tools that can exploit the money’s asymmetry. I am reading the maps of the great ones ».
Tenev says that the thinking of the old school that requires a trajectory to invest is “correlated with the thinking that the inversion is mainly for rich people”.
“Our focus is a different one, which is not necessary to be rich to do,” said Robinhood’s co-founder. «No need tener un doctorado en finansas. It is not necessary to carefully study the fundamental analysis, or the technical analysis in particular, and observe the moving media ».
Hecho, the Wall Street Bets move shows the impact that minor investors can have when it comes to one. Although some Reddit users have their basic assumptions made in a fundamental analysis, many are motivated by a populist motive to covert and fundraising elite investors.
GameStop ban
Robinhood has its objection to the critiques durante la saga GameStop, desde todos lados.
Some of the episodes come as a test of how free trade and the interesting interest bags can be counterproductive. In essence, the normal functioning of capital markets has been interrupted by a turbocharged line.
At the same time, Robinhood has been angry at the WallStreetBets community and would like to restrict this week’s highly volatile stock trade.
First, Robinhood, as well as other corridors, increased the margin requirements as much as GameStop as in AMC to 100%, which indicates a deep preoccupation with the extreme volatility of actions.
Margin accounts allow investors to buy shares and other valuables with earned money. To protect the liquidation forces, the investors must maintain a minimum amount of capital while maintaining the shares.
The Robinhood fue is a match for the everyday ban on the use of GameStop, AMC, Best Buy, Bed Bath & Beyond, Nokia and the favorite of Reddit. Otros corredores tomaron medidas similar.
WallStreetBets focuses on Robinhood, arguing that it is wrong for minority investors not to be able to buy these shares, for example Wall Street.
“Imagine being a lad of little ones like Robinhood”, wrote a user. «Another encroaching corridor paid for by the big players. I tried to get another corridor one time that this deadline and hope that all of us will do the same ».
El fundador de Barstool Sports, Dave Portnoy, critic of the decision and a una series de tuits.
«O @ RobinhoodApp allows the freedom of trade for final finals of Robinhood. Punto », dijo Portnoy.
Like Republican Ted Cruz as Democratic representative Alexandria Ocasio-Cortez, he attempted to launch an investigation into Robinhood’s decision, a coincidence of ideas that is unlikely.
When it comes to implementing the restrictions on youth, Robinhood appears to be marching back and forth that will limit the limited purchases of its values from the fires.
“This was a risk management decision and was not carried out under the direction of the market makers and those directing us,” Robinhood said in a blog post. “We are commencing to open the negotiation of some of these values of responsible manner.”
The company says that the medium is intended to maintain Robinhood in line with the requirements that must be met by the correction company, the net capital obligations of the Bolsa and Values de Estados Unidos (SEC) and the depositors of the chamber of compensation.
“Some of these requirements fluctuate depending on the volatility in the markets and can be maintained in the current round”, said in the publication. “These requisites exist to protect investors and markets, and we have a lot of our responsibilities to complete”.
During a nightly interview with CNBC, Tenev stated that the company recruited credit lines as a “proactive medium” because of the requirements of the compensation chamber dictating how much the company could allow customers to buy.
“In agreement with our mission and what we want to do, we want to provide conditions that allow our customers to be more likely to disagree with the requirements and norms,” he said. “We use these lines of credit to maximize, within reason, the funds we hold in compensation chambers.”
Interruptions and tragedy
The Reddit drama is the last of a series of controversies surrounding Robinhood.
With its lost users account, the emerging application as a pandemic winner. The people caught in the house, some of them with check checks for the host, will discover the easy thing to do in actions.
Robinhood will receive US $ 8,600 million and a round of financing in July, only to receive another US $ 200 million with a valuation of a mayor of US $ 11,200 million in August.
Pero Robinhood does not invest in the infrastructure needed to manage all users that it uses in the application. Sufrió decades of shortcomings and interruptions in 2020, including one that impedes that Robinhood users participate in an epic rally on March principles.
In the interview, Tenev says that Robinhood has made “huge gains” in the flexibility and redundancy of the system to minimize the risk of similar interruptions. Sondeverbod, Robinhood sufrió onderbreek ‘n principles of this week during the eye of the volume of operations, says Downdetector.
Robinhood has also attracted the scrutiny of legislators and regulators.
In June, the family of a university student of 20 years said that this suicide lawsuit revealed a confusion over a negative apartment balance of US $ 730,000 in his Robinhood account. The student is using the application to exchange options and his family creates the Robinhood interface.
Robinhood’s co-founders said that “personally devastated by this tragedy” and in response announced a series of changes in the offer of options and user interface.
‘Duro but extremely gratifying’
In my past, Robinhood’s regulators have accused them of attracting investors with their experience with game elements such as color confections and other aggressive marketing techniques. Robinhood does not agree with the accusations.
The Commission of Bolsa and Values accuses Robinhood of engaging in the revelations of the application regarding the payment by order of orders, the practice of paying the corridors to start the operations of the market creditors, such as the high frequency commercial firms. Probe acknowledges guilt, Robinhood agreed to resolve the SEC’s case with a fine of US $ 65 million.
To deal with its regulators, Robinhood reformed its management team, including executing Fidelity and Wells Fargo executives and appointing SEC executive director Dan Gallagher as its legal director.
“Difficult”, says Tenev about 2020, “but extremely gratifying to overcome these challenges and crucify another lad. We are much more fortunate as we understand that we are the principles of 2020 ».
So it’s good, because last week’s week suggests that 2021 will also be a pass for the park.
– Clare Duffy makes a contribution