Robinhood self clearing?

[qlai]

Self clearing broker - a receipy for disaster? Isn't it like self-audited business? Is this common?

https://www.wealthmanagement.com/technology/robinhood-s-bumpy-transition

 

[ajacobson]

Sounds more like teething pains. Any broker with a decent scale wants to go self-clearing to reduce expenses.
Clearly, Robinhood is all about keeping expenses low.
Apex's predecessor - Penson - failed, mostly based on concentration issues.

 

[Robert Morse]

Self clearing broker - a receipy for disaster? Isn't it like self-audited business? Is this common?

https://www.wealthmanagement.com/technology/robinhood-s-bumpy-transition

The big money in self clearing is the banking side of the clearing. (Debit interest and stock loan) Since that is a big part of their revenue stream in addition to PFOF, self clearing makes sense for them.

 

[qlai]

I understand the cost reduction plus a better control of the process. But is there more likely hood of optionssellers.com scenerio than when there is independent clearing?

 

[eastern_warrior]

They can't lend out stock on fully paid accounts. Do they really do much on margin on their presumably average small size account?

 

[mushinseeker]

in the daytrading domain, I think Hold Brothers was self clearing for a long time. Dunno if they still around.

 

[Robert Morse]

in the daytrading domain, I think Hold Brothers was self clearing for a long time. Dunno if they still around.

Hold Brothers is a prop firm not a clearing member. They do not deal with customer accounts. They clear at ETC.

 

[mushinseeker]

Hi Robert.
I was with them for 1-2 years. I remember having the option of joining their prop firm (w 10:1 leverage) or opening a Reg T with 2:1 or 4:1 over $25,000. We are going way back.

 

[Robert Morse]

Hi Robert.
I was with them for 1-2 years. I remember having the option of joining their prop firm (w 10:1 leverage) or opening a Reg T with 2:1 or 4:1 over $25,000. We are going way back.

I know they refer customer accounts to Cuttone an introducing broker. Look at their Finra Broker check.

 

[dealmaker]

https://www.sec.gov/news/press-release/2012-2012-197htm

Hold Brothers hit with $5.9 mln in fines for trading violations
https://in.reuters.com/article/holdbrothers-fine-idINL1E8KPE3H20120925