" But if RH takes in 500m of new money and 300m buys GME, then at minimum they are looking at posting 30m+ from just that exposure at NSCC. They cannot use client money - RH has to use their own resources to post. And if GME stock drops, RH has to post the loss pre-settlement."
Last I heard, the DTCC have raised collateral requirements on GME from 1-3% to 100%. Seriously. That's the real reason clearing houses stopped accepting new orders on GME from brokers.
This is exactly what Robinhood is doing too.
This twitter user explains, although it gets quite technical:
https://mobile.twitter.com/wallstcynic/status/13550134381546...
Look at the tweet at 7:41PM EST.
" But if RH takes in 500m of new money and 300m buys GME, then at minimum they are looking at posting 30m+ from just that exposure at NSCC. They cannot use client money - RH has to use their own resources to post. And if GME stock drops, RH has to post the loss pre-settlement."