When I get explanations like “you can’t buy or sell for your own good” on a funded account without leverage, at a time where the odds of money were sky high, it does seem fishy. People on WSB have been YOLOing entire accounts to zero for months, where was the concern when people were losing money? Why the concern when they are actually making money?
Also, if there is a good regulatory explanation, why not just give that, instead of thin statements like “we’re blocking these trades for your own good.” I’m open to reasonable explanations with evidence.
The messaging was not forthcoming, I’ll grant you that.
But they are actually correct if you take a step back. Protecting the DTCC protects all brokers and thus in turn protects their users.
The regulations and the practices followed in the industry are to protect against against real scenarios which can lead to brokers collapsing and investor funds being decimated.
Maybe it would have looked better had robinhood come out and said “we don’t have enough liquidity”, though that’s still not a reassuring message for their users.
Also, if there is a good regulatory explanation, why not just give that, instead of thin statements like “we’re blocking these trades for your own good.” I’m open to reasonable explanations with evidence.