https://www.zerohedge.com/news/2018-09-15/robinhood-investing-app-makes-millions-selling-users-data-

cdcaveman said:
They raise margin in crashes and auto liquidate your account at the worst prices... It's an age old trick... They dump huge market orders with your account without even an email
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If you use only your cash, you will never have a margin call. The margin call comes because you borrowed the brokers monies and they charge you interest to do so! Now, you put the broker's monies at risk, they will close your trade for you unless, you put up more monies! The broker will not lose monies on your account. They will make sure you cover it with your losses if need be! This is a lot like gambling in Las Vegas and asking the casino to give you credit so that, you can gamble some more! That is after sustaining huge losses!
 
smallfil said:
If you use only your cash, you will never have a margin call. The margin call comes because you borrowed the brokers monies and they charge you interest to do so! Now, you put the broker's monies at risk, they will close your trade for you unless, you put up more monies! The broker will not lose monies on your account. They will make sure you cover it with your losses if need be! This is a lot like gambling in Las Vegas and asking the casino to give you credit so that, you can gamble some more! That is after sustaining huge losses!
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It's actually called changing the rules of the game whenever you want
 
.. I completely understand the notion of margin and you're responding is if you're explaining the basic concept to me.. the deal is that most Brokers go by exchange minimums for margin.. but interactive brokers when the market goes wild raises their margins way higher than exchange minimums....
 
Why is this news again? Of course they sell their order flow, they have since day 1, they've disclosed since day 1, and anyone with an iota of understanding of what a for-profit enterprise is would realize that a company has to have a source of revenue to remain a going concern! Once again, zerohedge to the rescue with the blindingly obvious!
 
I think it's good it's the news. No one is surprised, but actually exposing it to public scrutiny is a good thing. If people doing that got exposed more often maybe the practice wouldn't be as wide-spread. Or maybe I'm just optimistic. :(
 
d08 said:
While I can at least understand the reasoning. They liquidate at market prices, as they should, what price would they be using, would you want them to speculate with your money during a margin call?
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IB liquidates exchange traded spreads(1-2 cents wide) using the outright futures(5-10 cents wide). I've heard similar stories re: ops. What reason is there for this other than profit off the liquidation? Certainly IB knows what products have exchange traded spreads/combos. IB may not be a bucket shop but its practices are deeply geared towards their own profit book. Nothing wrong with that either just don't be fooled by the mantra that the autoliq is there to protect customers. I won't even get into their margin practices or this latest daily exposure fee which is a straight up theft IMO.
 
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smallfil said:
All brokers do the same thing. It is called protecting your monies. Nobody is going to let you use and lose their monies and not pay for it!
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When you don't know what you are speaking of it's best to be quiet. There are plenty of large brokers out there who stick to exchange margins(which can change) at all times even during stress. And it's not their money, it's my money deposited for margin purposes. It's my decision how i choose to deploy that capital.
 
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