Robinhood users took to Twitter to express their discontent that they cannot revel in the failure of SVB and Signature Bank.
Users of the Menlo-Park-based financial services firm’s Robinhood Markets Inc (NASDAQ: HOOD) app have been unable to take advantage of the recent slump at Signature Bank and Silicon Valley Bank (SVB) despite their trading options. sale. Investors bet on the possible fall of the shares through put options. If you’re lucky and the stock price goes down, the trader might sell the stock at a price higher than market value. Alternatively, investors can sell the contract to another trader taking the risk that the stock will decline further. People make a profit either way.
Robinhood user complains about not being able to make betting profit against SVB and Signature
Robinhood users sensed a possible drop in SVB and Signature Bank shares before the US banks collapsed. Therefore, some bought put options on the shares. As Robinhood users expected, SVB and Signature Bank collapsed, and the unfortunate event should be to their advantage. However, users of the trading app said that the financial services provider does not allow them to sell their contracts or receive payments. To top it off, many of the contracts would expire on Friday. This has also caused many traders not to be ready to take advantage of the opportunity.
Forbes explained that the fact that SVB and Signature Bank shares are no longer traded makes it difficult for Robinhood to allow users to get paid. Since the shares are no longer on the market, many are unwilling to buy the contracts. SVB Financial Group is currently closed 60.41% at $106.04.
Similar to Robinhood, there are comments against Fidelity Investments for not paying retail option traders. But the attack is big on Robinhood because of its history. While the mobile trading app is designed to give people access to the market and democratize finance, the big rally in meme stocks in 2021 bogged Robinhood down. The alarmingly growing demand for GameStop shares threatened the infrastructure of the platform. The financial services company was unable to sufficiently meet the demand, causing the company to nearly collapse. Robinhood also had to take on Congress and the House Financial Services Committee.
Robinhood users took to Twitter to express their discontent that they cannot revel in the failure of SVB and Signature Bank. Popular short seller Marc Chodes also weighed in on the matter, advising users of the trading app to hire a lawyer.
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Ibukun is a crypto/finance writer interested in conveying relevant information, using non-complex words to reach all kinds of audiences. In addition to writing, he enjoys watching movies, cooking, and exploring restaurants in the city of Lagos, where he resides.
