As expected, these are reasons for why RH needed to stop customers trading certain stocks, not any collusion with hedge funds. RH has also raised $1 billion from investors in the meantime.
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I donât buy it. 
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Itâs very convenient isnât it. Thereâs plenty of evidence HFT and other institutional investors were on the side of the rally and, lets be honest, would have constituted a large proportion of volume (if not a majority). Then brokerages non-transparently restrict their services allowing other market participants fulfil orders while there is minimal volume. None of them initially mentioned clearing being a factor, rather ârisk mitigationâ. I suspect that is because settlement wasnât the only factor here, otherwise they would have just said that and avoided many unhappy users.
Edit:
This seems to be a better explanation. Still seems like shocking levels of third-party risk at the heart of the financial system. Can see capital requirements at brokers being strengthened after this.
https://twitter.com/KralcTrebor/status/1354952686165225478
"The policy goal here is to avoid the central plumbing entities from taking credit risk. In reality, such regulations raise costs and create barriers to entry. It raises profits for entities like DTCC (which owns NSCC and is itself owned by Wall St). RH offered to open up stock market investing more broadly. They succeeded, clearly. But the regulations didnât change - there are still pro-Wall St, pro-incumbent rules and capital requirements. "
Both up big in PM now retail allowed to buy again
Imagine if you didnât have these capital / collateral requirements; the money of RH traders would long be gone!
Regulations might be pro Wall Street, but you would need even HIGHER capital requirements to protect retail investors. RH certainly made huge mistakes by gamifying leveraged trading, promoting risky products, and not disclosing / educating investors about their payment for order flow revenue stream. This certainly will have consequences for the industry, but RH is not required to allow traders to open new positions in risky stocks.
If I lost money on the roulette table, I wouldnât file a class action suit against the casino for letting me lose money, not allowing me to play more roulette games, or claim damages because the ball landed on a certain number which I would have chosen if I played another roulette game.
RH certainly is an abysmal company when it comes to how they treat their customers but a class action suit seems to be an overkill, showing how few traders actually know how financial markets work and what the role / responsibility of a broker is in this system.
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It is a perfectly acceptable explanation but I donât understand why RH, T212 and others were not upfront about it. All talk about customer safety. RH has seriously burned itself and I can see many people moving away from them. Also; why could they not get their credit lines open yesterday before the market opened? Also: why were the stocks removed from the search engine? So many things that broke trust yesterday that did not have to happen.
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I think some of the true reasons are understandable in the finance world (unable to cover shares on margin, lending out retails shares to short etc) but donât play well at all in the news or social media and would stir up the hornetâs nest more. The real reason is always to protect themselves, its not a conspiracy. Iâve seen people slagging off RH on WSB for years saying they sell your data to citidel but mostly it was met with ambivalence until this week.
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I just wanna chip in my two cents here and offer some feedback around what has frustrated me over the past couple of days with FT whilst trading a volatile stock.
The price in the app is painfully slow at updating. With a Basic Trade, this doesnât really matter - you get the best price available at the time. The price is simply a useful indicator.
But when youâre using Plus features - setting stop limits, limit orders, triggered orders etc, the app refuses to accept your trade because it thinks the trade doesnât make sense - because it has price data that might be upto 5 minutes old!
Like I said, this obviously doesnât usually matter. But forcing decision making from data 5 minutes old is really poor. Due to this restriction, yesterday, trading you-know-what, I was trying to set a stop loss for about 25 minutes, but the price was always way off. The price I was trying to set at was long gone by time Freetrade caught up.
My recommendation, and a quick fix, would be to implement this logic as a warning, rather than a âno, you cannot tradeâ. Show that the limit youâre placing may execute immediately or be rejected, but allow me to do it anyway, as right now, FT price data is not accurate enough to support this functionality.
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You really should watch Viktor speaking on Sky News today here:
Couldnât be more transparent.
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âOblivionâ, âitâs going to get uglyâ? How about you make your point without taking threats. There has been 0 indication that Freetrade HAVE acted, or WILL act in any way other than correctly and in a way that treats customers fairly. They stood behind retail investors yesterday, and at every other time and to issue these unnecessarily aggressive ultimatums is totally ridiculous.
There may be circuit breakers put in by the individual stock markets that Freetrade can do nothing about but Freetrade wonât be deciding what you can or canât buy.
Perhaps you should leave the threats out and laud them for being one of the few who were in a position to support retail traders at this time. I understand you probably just feel let down by the system, but thatâs a reason to be supportive, rather than pre-emptively hostile to the actions of a company that has been nothing but transparent and innovative in democratising trading, the right way (without relying on products that mean 76% of investors lose money - ie, CFDs) up to this point.
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Truly bizarre and out of left field post there.
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You would if they took your number off the roulette wheel when you made the bet.
Hi everyone 
Hereâs an update on whatâs happening.
Yesterday, we saw a 10x increase in daily new customers and a huge number of orders.
Some orders were delayed due to a combination of market-level circuit breakers halting trading on some stocks, and the huge demand on our platform.
We remained operational throughout, working with our partners and on our platform to improve capacity issues.
As the day went on, orders were processed more quickly and smoothly.
We may see further queued orders today due to issues with various partner providers. We are working with them to minimise any impact on our customers.
Volatility with stocks like $GME and $AMC is likely to happen again today, including circuit breakers at a market level to temporarily halt trading.
There may also be a delay replying to in-app messages.
Please keep an eye on our tweets for updates.
Important: Bear in mind that this volatility means investing in these stocks can be highly risky. As always, your capital is at risk.
Finally, do check out @Viktorâs interview on Sky News this morning!
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For sure, and donât worry, weâve had words!
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Guys posting on Reddit suggesting silver might be the next gme play due to longstanding price manipulation. Can we get $slv on FT pls
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This guy explains it better than i can.
TLDR:
- More stocks were shorted than there are stocks in total.
- If GME stock keeps rising there is almost no limit to how much money can be lost. It can be within 100 billions just this week.
- If the institutions who lost the money can not pay it to the broker (and they canât) the broker is under obligation to pay for it (because itâs brokerâ obligation to not sell more stuff than institutions can afford). Smart brokers have automatic stop losses, but not all brokers are smart. This can easily cause domino effect with brokers closing one after the other.
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People have been crying manipulation in the silver market for decades, mostly due to not understanding futures markets, no doubt there are a few dodgy practises going on but you canât manipulate something down for that long without supply and demand taking over.
although this doesnât mean reddit canât cause it to spike if enough of them buy in
I think it will be harder to do with silver, because theyâll need to either buy tonnes of silver or rely on buying derivatives
I wonder how many times wsb can play this game. At a certain point shorters will know not to short anymore out of fear to be eaten alive so that takes away the reason of existence for wsb.
I think itâs only going to really work once, and this is it.
GME is the only stock where short interest was over 100% as far as I know
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