Hero or villain? NSCC draws fire for Robinhood margin waiver
Fears of moral hazard after CCP waives billions in margin demands following meme-stock volatility
The Robin Hood of legend took from the rich and gave to the people. That myth was turned on its head in late January, when Robinhood Markets – broker to thousands of retail punters betting on so-called meme stocks that had exploded in value – got a call from its clearing house demanding payment of a $2.2 billion special margin charge.
The cash call, which arrived just after 5am on January 28, far exceeded Robinhood’s stated capital on hand and borrowing capacity. The firm was in a panic: if it
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Industry fears Emir 3.0 fast model approval will cause delays
More model changes could be caught by proposed criteria for defining significance
NSCC liquidity shortfalls raise T+1 concerns
Lagging FX settlement processes could become a problem for clearing houses
Basis traders mull UST self-clearing as response to SEC mandate
Inter-affiliate exemption requested by hedge funds could ease shortage of clearing capacity
Fed’s NBFI scenario may be more use than CCAR – experts
Main severely adverse scenario does not capture contagion risks from any squeeze on non-banks
Auto-encoding term-structure models
An arbitrage-free low-dimensionality interest rate model is presented
Configuration and control: next-level risk analytics for alternative assets
The evolving needs of traditional and alternative asset industries, including the transformative impact of advanced data analytics and model training within new customisable frameworks
CCP models vulnerable to Trump risk
Volatility of ‘will he, won’t he’ tariff strategy could confound clearing house risk models
CME-FICC cross-margin extension timeline questioned
SEC changes and queries around margin segregation may make end-2025 deadline unrealistic
