How about Interactive Brokers case then, or AFAIK TD Ameritrade. They don't offer instant settlement (or may be they do, but the same was applied to settled money). They blocked buying GME stock on nonmargin accounts with settled money. What's the risk for them?
I don't know if the same was applied to RH (blocking GME stock on non margin account with settled money) but what I read is RH even removed GME ticker from the search, so you can't buy it.
edit: from the Bloomberg article you posted: "The trouble on Thursday began around 10 a.m., when after days of turbulence, the DTCC demanded significantly more collateral from member brokers, according to two people familiar with the matter.".
So I have my money settled in my broker's account for months, I'm buying without lending any additional money, why can't my broker show that I have all the collateral needed or even transfer my money?
Am I missing something here? Does it work per broker and not per broker's account maybe? So people with settled cash are affected becasuse of other people doesn't have enough collateral? Or may be because showing/transferring collateral to DTCC is not instantenius?
Honestly I'm not getting it. I understand the case when someone initiated the cash deposit and money are not settled yet, and there is a risk for broker that they will never settle on broker's bank account. But if we are talking about buying GME stock in non-margin account with settled money, what's the risk there?
If people bought stock on 400$ with settled cash, this cash is already on broker's account, so if it worth 20$ on Wednesday and poeple won't show up, what's the problem here?
Brokers even blocked buying GME stock on non margin accounts with settled cash.
edit: typos
Can you please elaborate on why DTCC collateral calls or other things should prevent buying GME stock on non-margin accounts, like many brokers did? If you trade more, it actually brings more money to brokers.
I'm not talking about options or margin here, that's a different story and broker's risk management is involved.
Can you please elaborate on systematic risk in the light of not allowing to buy GME stock (not options) without margin (no money lended from broker), what many brokers did today.
Are you talking about brokers or money makers? If it's brokers they usually make money from trading activity (traders, deposits,withdraws,holding money in they accounts).
If it's money makers then they can't "stop taking new positions", as they are not working directly with retail investors.
It's not only about options. You can't buy even 1 stock of GME on non margin account. I don't understand how it has anything to do with IB risk management.
That's what they advertise via Twit. But if you try to buy even 1 stock of GME on non margin account (our own money only) it doesn't allow you to do that. I have a screenshot for that if you want. And customer support line is overloaded as expected.
edit: from the Bloomberg article you posted: "The trouble on Thursday began around 10 a.m., when after days of turbulence, the DTCC demanded significantly more collateral from member brokers, according to two people familiar with the matter.". So I have my money settled in my broker's account for months, I'm buying without lending any additional money, why can't my broker show that I have all the collateral needed or even transfer my money? Am I missing something here? Does it work per broker and not per broker's account maybe? So people with settled cash are affected becasuse of other people doesn't have enough collateral? Or may be because showing/transferring collateral to DTCC is not instantenius?