An in summary update of where Robinhood is at.
- the firm has drawn on credit lines in amounts said to be 'hundreds of millions of $" by media reports
- lenders to the company include banks like JPMorgan & Goldman Sachs
- the firm has raised margins on trades
The causation runs:
- Stock-trading clients of Robinhood clients take on margin deb
- Robinhood lends clients the cash to do this and, in turn, has drawn on credit to front the cash
- the risk to the 'Hood is if the stocks fall hard client margin debt may not get paid back
- RobinHood moved to control this risk both by placing curbs on trades and drawingon credit lines.
