I'm really skeptical that robinhood shut down buys because they were the ones worried about counterparty risk. That's kinda out of character. And then extended that concern to 50 other stocks.
There’s zero risk to Robinhood to settle a full-cash Buy of a security, except for counter-party risk not being able to deliver the shares free and clear.
Lack of truly real available GME shares are literally the whole issue at hand here, since literally more than all of them have actually been loaned to the Hedges to short.
The funds are deposited and under the full control of Robinhood.
This theory that Robinhood has to match their customer fully cleared funds with their own dollars, which can’t be backed by the customer funds, in order to actually take delivery of the shares and only then can the customer account funds be debited.... It’s been repeated constantly without evidence, and I’d really like to see the evidence.
You're saying this, but the rules (which are convoluted) appear to require fund segregation, and, moreover, when MF Global was accused of doing what you're talking about, it was a major NYT and WSJ story.
> The story states that a London clearinghouse forced MF Global to pay roughly $300 million to back some of its bond holdings during its last week.
There's a mountain of difference between sending customer money to purchase customer's own securities, versus raiding customer accounts to pay a margin call against your own bond holdings.
You cannot raid customer funds to pay for proprietary (broker's own) activity. Of course using customer own funds to pay for customer's own orders is not restricted. There's nothing to collateralize for a fully cash funded share purchase. Collateral can only possibly be an issue if the customer is trading on margin.
