Should You Keep Using Robinhood?
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\nTitled \u201cA Note From Robinhood\u201d
\nFor Robinhood to operate, we must meet clearinghouse deposit requirements to support customer trades.
\nDeposit requirements are determined in part by how much stock a firm\u2019s customers hold. If a firm\u2019s customers\u2019 holdings are volatile, a broker (in this instance Robinhood) is obligated to meet higher deposit requirements.
\nLast week, in part due to volatility in some popular stocks, Robinhood\u2019s deposit requirements rose tenfold. The combination of the deposit increase and the extraordinary increase in volume on these particular symbols led us to put temporary buying restrictions in place on a small number of those stocks.
\nWe had to take steps to limit buying in those volatile stocks to ensure we could comfortably meet our deposit obligations. We didn\u2019t want to stop people from buying stocks and we certainly weren\u2019t trying to help hedge funds.
\nNow, the confidence I have in using the platform comes from the FDIC insurance up to 250k
\nThis is my opinion.
\nThe idea of leaving the platform as a matter of principle is off-base
\n1st, several platforms did the same thing and will do it again in the future.
\nThe reality is, there\u2019s WAY more people trading now and a lot more money in the system.
\nIt\u2019s really easy to trade on margin (borrow money from a broker), that\u2019s the real issue.
\nRobinhood was the bridge millions of people needed to feel comfortable trading and investing.
\nThey, along with a few other smaller companies forced the adoption of many retail friendly tools
\nOne of which was no commission trades.
\nFeeling betrayed by someone that brought you along can be hard, and emotional.
\nWhatever your decision, I suppose I just wanted you to know that it is still very safe to trade and invest on Robinhood because your money is insured up to 250k. Slowdowns on heavy volume in the first 15mins are a blessing in disguise for many newbie traders because morning movements have destroyed more accounts than any other time during market hours
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