> You trade with robinhood's money, then they can decide not to lend it to you anymore for nearly any reason they want.
Can they? I thought margin calls were you personal debt. It's like the bank deciding to sell your house that you have mortgage on because they think the market is too volatile. Makes little senes.
> One of the most important things to understand about margin calls is that your brokerage firm has discretion as to when you are required to increase the equity in your margin account. Some firms will attempt to contact you to tell you additional equity is required, but they're not obligated to do so. Whether or not your firm has contacted you, they can take immediate action to increase the equity in your account if they decide the equity is too low and is not in line with the risk of your account. This means they can immediately sell out whichever securities they choose, regardless of the financial and tax obligations for you.
You have to admit, though - that is disingenuous. Those plays were profitable, no need to call them (unless there has been irresponsible behavior on the behalf of the broker)
That is entirely up to the broker. They make no guarantees to you that they'll underwrite your risk taking with no limits. If you don't want this to happen, go to a reputable broker and make sure you are not trading on margin. This is not rocket science, but does require a basic level of understanding.
I agree that this is the technically correct definition of how margin is typically utilized, and that investors should be prepared for this in the case of high volatility.
The fact does remain, though, that the way the data is presenting itself seems to indicate that there was disingenuous behavior on the behalf of market makers and a number of hedge funds. To be seen, I guess.
I mean, assuming manipulative self-interested disingenuous behavior on the part of market makers and hedge funds on a daily basis is usually a safe bet. Also on the part of nearly anyone interacting with the stock market who has the power to do it. It's kind of the whole game. True, that may not be how they teach it to you in high school.
You trade with robinhood's money, then they can decide not to lend it to you anymore for nearly any reason they want. ¯\_(ツ)_/¯