It’s Time for Real Time Settlement
blog.robinhood.com
blog.robinhood.com
If you only think about the American stock market from the perspective of a domestic retail day trader, sure, real-time clearing sounds easy enough. When you expand it to institutions, real-time settlement means having to warehouse all the funds they might need to trade with in a day with their prime brokers as cash. Not Treasuries. Cash. Because their broker has to be able to wire out that $1bn instantly. (That's what real-time settlement means. Real-time payments.) For market makers, this effectively requires removing their buyer of last resort obligations since they would be practically capped by their cash on hand. There are additional complexities when one considers foreign investors. Options exercises and expirations. ETFs. Futures.
Historically, the loudest advocates for shortening settlement times have been global money centre banks. A switch to real-time settlement and clearing would require every market participant either (a) have flawless payment rails to every other market participant or (b) put all their cash with a global bank who can provide that guarantee.
End-of-day or overnight clearing, on the other hand, isn't too much to ask for. It preserves the robustness and extensibility of delayed settlement. But it removes a few days of collateral requirements. Pushing for EOD clearing would be a smarter play for Robinhood, from a government relations perspective. (If this is solely PR then whatever.)
The simple reason in this age of high frequency trading and massive amounts of money being moved around, a tiny arbitrage opportunity could instantly be magnified and trigger a system (market) crash. Whereas these crashes can and do occur today, the non-realtime aspect of settlement and clearing mitigates to a large extent. See the 2010 flash crash example: https://en.wikipedia.org/wiki/2010_flash_crash
In addition, I'm dubious of how "real time" this proposal will turn out to be. For one there are a number of dependencies and steps that need to be fully aligned to expedite from end of day to something faster. True real time systems are a rarity - most of the time the latency is still measured in minutes or hours. A flashy term that tech companies like to throw around.
Also this feels like a diversion tactic from the implosion of Robinhood of the company from last week's debacle. For those unaware, RH also put limits on AMD stock to be traded - what the heck?!
How so? I'd argue that the SEC policy of breaking "clearly erroneous" trades before settlement exacerbates that kind of flash crash: market-makers can't step in to prop up prices and then hedge their exposure, because their trades will be broken and their hedges won't. If settlement was real-time, preventing flash crashes would be profitable and people would do it.
> Also this feels like a diversion tactic from the implosion of Robinhood of the company from last week's debacle. For those unaware, RH also put limits on AMD stock to be traded - what the heck?!
It's not a diversion, it's a genuine explanation - the collateral requirements were why RH had to impose a bunch of limits.
I'm a bit lost on your response. Are you advocating against SEC or stock exchange intervention? Remember that trading can be halted by stock exchanges also in order to decelerate massive movements. If the settlement happens on even a by-minute increment, then there is no effective recourse for these interventions. Flash crashes are black swan events and as such there's little incentive (as of now) for companies to build safeguards against it.
> It's not a diversion, it's a genuine explanation - the collateral requirements were why RH had to impose a bunch of limits.
It's an explanation but doesn't explain why other stock brokers didn't impose the same limitations, nor why RH is tapping its credit lines. I say it's a diversion because it's an attempt to deflect blame for its own poor business practices and policies - e.g. if my server can't handle the load, I can't just say "well, if I had a faster load balancer...." to my users.
Other brokers did impose trading restrictions on GME (and other stocks) around the same time as Robinhood. Webull, M1 Finance, Public, and E-Trade all halted buys of GME.
Others, including Interactive Brokers, TD Ameritrade, Schwab, and Trading 212 implemented restrictions such as halting options trading and greatly increasing margin requirements.
The decisions by IB, TD Ameritrade, and Schwab all seem pretty prudent to me. Reducing client leverage in that situation is the right move.
Yes, I'm advocating against them. My position is that SEC and exchange intervention makes flash crashes more rather than less severe. (Also they're harmless; artificially suppressing the volatility of the stock market makes everything more fragile, we'd be better off embracing them and making sure all market participants are equipped to handle volatility. It's like how decades of suppressing forest fires has made forest fires much worse)
> It's an explanation but doesn't explain why other stock brokers didn't impose the same limitations, nor why RH is tapping its credit lines. I say it's a diversion because it's an attempt to deflect blame for its own poor business practices and policies - e.g. if my server can't handle the load, I can't just say "well, if I had a faster load balancer...." to my users.
If your hosting service suddenly cuts your server capacity down by 2/3, I think it'd be fair to complain about that to your users.
There are actually a variety of HFT strategies, but there's good evidence that the high-speed market-making variety are good for small volume investors. Those in favor of getting rid of HFT should be specific about exactly which sorts of HFT they want to ban.
The narrowing of mean bid-offer spreads isn't surprising, since many HFT strategies are essentially faster versions of traditional market making. They're able to offer narrower spreads (better prices) than traditional market makers because they're faster at widening spreads (worsening prices) when the market starts to move in one direction. On average, this means better prices for people trading small amounts of stock. However, for large institutions that trade market-moving volumes, low-latency market making means worse prices, since the market makers are faster at noticing and widening spreads when there are large market-moving trades afoot.
Also, the ETF arbitrage variety of HFT strategies reduce the amount that ETF prices differ from the prices of the individual stocks within them. This results in fairer prices for people who primarily invest in ETFs.
On the other hand, low-latency market-making results in less liquidity being offered when the markets are moving quickly in one direction, which is when it's most important to have liquidity.
Also, for the average person, a very large portion of their exposure to the stock markets is through pension funds and mutual funds, which tend to make the sorts of large-volume market-moving trades that are hurt by HFT's ability to notice and quickly get out of the way to avoid being run over.
Disclosure: I've never worked for an HFT fund, but I do work in the financial services sector. I did some work on systems designed to reduce market impact of large institutional trades, part of which is breaking up patterns so that HFTs are worse at noticing and widening their spreads.
settlement is a necessary but undesirable part of the business of a brokerage, because it locks up capital, which is costly, for a business model whose margins are shrinking rapidly. it used to be that brokerages could earn something from the overnight repo on the balance sheet in order to compete aggressively on fees but nowadays overnight rates are so low and zero-cost execution is the cat let out of the bag. maybe prime brokerages can comfortably rely on the bank's overall B/S to manage this risk but specialist and retail brokerages are all aggressively shrinking capital to stay competitive at the cost of not doing business on days like these. how much is robinhood paying for drawing down those credit lines over the last week just to tide over the 2-day mismatch in trading and settlement? how close was it to getting stopped on doing business in all the other tickers that aren't GME and AMC? I honestly think robinhood would rather not have done that wsb business at all.
as a side note, the ficc (which is the fixed income part of the dtcc) already does intraday matching. this is not, as i understand it, exactly settlement, but a pure flow brokerage, lets say, can net down their two-way exposures to reduce margin. this mollified the margining requirements surge in march 2021 when gov bond vol increased 3-4x.
I see two solutions here, either they sell the treasures (with also instant settlement) and then buy, or they could trade on margin backed by the securities. Or am I missing something?
Treasuries don't instantly settle or clear. They clear next day. We could discuss changing that, but it's about nine hundred times more complicated than overhauling the entire stock market.
> or they could trade on margin backed by the securities
This shifts the entire market's credit risk to the banks. Which banks love. (Getting away from that is why we built clearinghouses.)
The U.S. has a real-time payments system. (One of the oldest in the world.) It's called Fedwire [1].
It's artificially kneecapped–Congress set a minimum fee of pennies on the dollar and many banks charge retail clients $10 to 35 for wires. But the rails are there and used and understood.
(Detour: my "abolish the penny" issue is expand Fedwire's market hours, enable it on weekends and remove all Fed fees for wires under $250,000.)
[1] https://www.federalreserve.gov/paymentsystems/fedfunds_about...
That is almost entirely your bank charging a mark-up.
The Fed charges its members between 3.3¢ and 84¢ per wire, depending on things [1]. (It can go as high as $1.20 for a $100+ million wire from a bank that handles fewer than 14,000 wires a month.)
My bank, for instance, doesn’t charge anything for wires.
[1] https://www.federalreserve.gov/newsevents/pressreleases/file... page 34
You are seeing this change in terms of the existing system ("100% collateral parked at intermediaries!"). But ultimately it might be possible to get rid of (some of) the intermediaries altogether, and move to direct atomic exchange of bearer instruments.
The Ethereum "defi" phenomenon is showing us a glimpse of what's possible. It would require an upgrade of the dollar to a CBDC though, or perhaps just wider use of stablecoins such as USDC.
If you have collateral that can also be transferred in real-time, can’t that back a cash loan immediately with extremely low interest costs?
Cash is the only thing with an agreed upon fixed value
This is what the parent comment was talking about.
It's possible I was confused.. I thought you were complaining about the inequality between high speed traders and mere humans clicking on web pages..
When we talk about "increased spreads" everyone pays the costs of that. What's the upside?
But there's no fundamental reason that loan must be made by your broker, aside from the historical T+2 convention. You could just repo the shares for two days while you wait for the cash to arrive.
The way it should be. The quicker we do away with interest bearing and yielding assets, the better. It's the cause of the vast majority of the economic mess we're in today. We've literally known about this issue for thousands of years, interest and usury have been prohibited in Islam, Christianity, and Judaism. We still think we're smart and not going to be bitten by the dangers of interest, yet that won't happen.
It filled me with dread because it would destroy our current agricultural industry. And as much as I recognize the problems with it, “a large percentage of the population starving rapidly” was not an outcome Id endorse because of injunctions from pre-industrial wisrmen.
It's more than usury. There is usury involved because "lending" the stock is done with interest. However, the problems don't stop there.
Stock shorters, as you point out, actively bet against a company or industry or economic structure in general, it's their benefit to see a company collapse or not do well. This isn't how a stable society should be set up.
Furthermore, stock shorting exposes three parties to risk: the original owner, the shorter, and the new owner. There is risk being created in the market that does not justify the value that comes out of it. Let alone the fact that it's possible to short more than 100% of the total stocks, on what planet is this even acceptable? In a normal stock trade, risk is transferred from one party to another equally.
The conclusion is that shorting is a heavily immoral, predatory, and dangerous practice. It's quite ironic that when ** hits the fan, the government has to step in to limit certain trades or practices that we've known all along to be dangerous (e.g. they lower interest or ban shorting).
Companies that have inefficiently deployed capital or have problems like a Theranos or Enron should collapse. People keep acting like shorts show up to a company like Apple and take it down. That's not at all what happens. Shorts are a lot like vultures. We may not like to see what they do, but they provide a service by cleaning up dead carcasses.
If you want to argue that shorters spread (dis)information in a company and should be more closely looked at, I might agree. My immediate counter though would be that I see way more positive information spread in general, and people rarely seem to check that until it so blatantly false things collapse.
and why not? antifragile systems gain stability as they endure shocks. why not cyclically generate then destroy business? makes it easier to funnel resources to the top, because only the biggest - i.e., the most moneyed, hence the most liquid, hence best reactive to risk, hence most stable - firms can survive.
you may not like it morally, but two centuries of corporate history leave little to gainsay empirically about this notion.
Without it most agriculture would be too risky to engage in (without a governmental entity stepping in and doing the same activity as the futures market).
For all it's evils, our modern society and advancement as a species comes from capitalism. Society would literally collapse if we "do away with interest bearing and yielding assets."
That being said, we can still work to create better finance regulation.
If that's true, then it's fundamentally broken (assuming interest bearing loans of course). You will never have a sustainable economic system that is based on interest bearing loans, we see it all the time with people waiting for the next crash to happen.
> No debt means no credit for new businesses
Not true. There are moral alternatives. If you want to start a business, pitch your idea to investors who are willing to put in money in exchange for a portion of the company. If it works out, everyone profits, otherwise, everyone takes risk equally and the holder of the idea is not left with crippling debt. This is just and fair.
> No mortgages.
Mortgages artificially increase property prices, continuing the cycle. There are alternatives that don't involve interest. You see it all the time in the auto industry where they have 0% loans. Do the same with houses. We already did that historically in Muslim nations.
> Governments can't issue bonds to raise capital.
Raise capital in an ethical way. The government can invest in its society and businesses for example. Obviously there are other solutions but that's for the specialists.
> Society would literally collapse if we "do away with interest bearing and yielding assets."
Except it didn't when people followed the teachings of their religion (specifically Islam). Great empires were built without interest. It's possible, it's just that it isn't as easy or perhaps convenient to those who stand to benefit the most from interest.
If your perspective is that artificial bubbles in asset prices will be reduced by lowering the cost of borrowing (i.e. no interest) then you're going to have to explain that, because it's the opposite of what normally happens.
EDIT: Shariah-compliant mortgages are generally constructed so there's no interest, but the cashflows between the parties often look very similar. e.g. a Musharakah loan where you only initially own the home in the proportion of your downpayment but gradually buy more of it over time by paying the bank off over time, as well an element of rent. Interest rate is replaced by return rate because the form of the contract is different.
Yes we should all switch the current economic system which has been the root cause of societal development. And we should switch to a fairy-tail system which you describe but miraculously does not and has not ever existed. One where people will lend out money for free! Why don't you start us off? I'd like a free loan please.
> Not true. There are moral alternatives. If you want to start a business, pitch your idea to investors who are willing to put in money in exchange for a portion of the company.
This is hilarious because its just another form of lending which in fact does yield interest. How do you think the investors will track ownership of the company? Shares which appreciate aka big bad interest.
> There are alternatives that don't involve interest. You see it all the time in the auto industry where they have 0% loans.
There are strings attached to those loans and the average auto loan absolutely has a non-zero interest rate. We are currently experiencing a massive auto loan bubble. Handing out low interest loans indiscriminately is irresponsible and the cause of massive economic damage throughout history.
https://www.thedrive.com/news/33065/zero-percent-financing-a...
> Raise capital in an ethical way.
I think you are confused. The government is "taking out the loan" by issuing bonds and paying an interest rate to the bond buyers. So which side is unethical? The lender or the borrower?
> Great empires were built without interest.
Like which?
At the end of the day, nobody is going to lend money without financial incentive. Why accept the risk? If you disagree then ask yourself why aren't you loaning out YOUR money for free? I will happily accept a free loan.
Well, we've got an idea. You redesign your entire business so that we don't need collateral, and that way, we no longer have our problem.
Also, does anyone find this stupid "we have the best financial system in the world" bullshit a little insulting? It's just jingoistic PR chest beating. Pro-tip: Whenever you're in trouble, talk about how great America is.
I'm waiting for Elizabeth Holmes to release a statement about how the CDC should instruct all humans to encode the disease they have into their blood, because then Theranos would be a home run.
I guess what I'm saying is: If you're running a business, do your job.
Even still: Yes-- good budgeting with savings should allow you to face an obstacle like a 10x mortgage payment. I'm not particularly frugal but I could, at a pinch, gather that much money. Assuming you're putting aside the recommended 6 months living expenses for an emergency, the non-mortgage part of that savings should cover the other 4 months.
RH is in a business that requires the deepest pockets of literally any industry on the planet. If they don't have that capital, they don't get to play, and that's their fault.
If you don't envision such a clearly possible scenario as a bank , or a broker (your mortgage payment suddenly going to be x10 is not such a clearly possible scenario) you severely fucked up in your chosen field of business, period.
Credit where it's due: ripping off the commission band-aid was overdue, and Robinhood single handedly caused it. And abridging T+2 is probably a good idea. (Though real-time settlement and clearing is probably not.)
What's missing in their communications is the mea culpa. We got into this to make big changes. We made them. One thing we overlooked was this weird bit of the financial system. Here is why we missed it, here is why it is obscure, and here are our tabula rasa suggestions on how it could be improved.
This seems to me a lot like when VC backed startups artificially suppress prices below break even to push out competitors, with the intent to raise prices even more later. It's good for the consumer while they can get VC subsidized goods and services, then very bad for the consumer once the VC funds dry up.
Are there serious accusations of front-running (a serious financial crime) and collusion to facilitate that crime? Or are you referring to people with a poor understanding of the interactions here making complaints that really boil down to privacy concerns, not actual front-running?
I haven't seen anyone post any evidence of actual front-running.
For why Citadel would pay for retail flow, if they're not committing financial crimes, market making is essentially profiting from separating pricing signal ("alpha") from pricing noise. If the prices are jumping around randomly, you make money by holding prices steady against that noise. If the prices are moving in one direction because new information ("alpha") has become available, you lose money if you try and hold prices steady against those moves. Empirically, in aggregate, retail flow has a lower signal-to-noise ratio (lower alpha) than the market as a whole, so market making on just that flow is more profitable, even though Reg NMS[0] requires Citadel to give RH customers' round-lot orders prices at least one cent per share better than available in the open market (price improvement over NBBO, combined with no sub-penny pricing).
By paying to exclusively trade against a low-alpha channel and damp out some of that noise before it affects the market as a whole, Citadel makes more money, at the expense of other market makers who would normally have exposure to that noise.
Also, there's a bias in execution called adverse selection: bad trades tend to get filled faster than good trades. For their non-market-making strategies, crossing against low-alpha flow has less adverse selection than trading those strategies on the public markets. Here too, RH customers trading round lots get prices at least 1 cent better per share than NBBO, unless the orders are passed through and placed on a regular public venue.
Disclosure: I work in financial services, but have never worked for Citadel.
He's not wrong that instant (or same day) settlement would be better than T+2, but there were plenty of other brokers that did not restrict trading. This was a liquidity issue for robinhood. This is a risk you run being a "cool startup that moves fast and breaks things" in the arena of securities trading. Additionally, Some of the bugs they've experienced are absurd in the context of a broker that potentially houses people's entire liquid net worth, including a bug that reversed the direction of trades - "oh you meant to sell those shares? whoops!"[0].
Why choose robinhood when the alternatives include some of the most well capitalized institutions in the world, eg JP Morgan or Bank of America Merrill Lynch - they have literal trillions in assets each and neither has these issues. I appreciate that robinhood pioneered zero commission trades, but that has been largely adopted by the industry at this point. From my standpoint I only see risks versus their peers and precisely zero benefits.
I implore everyone here to stay far away from robinhood.
[0] https://www.nytimes.com/2021/02/02/technology/robinhood-ceo-...
It seems they raised deposit requirements potentially more than was standard. This needs to be investigated.
WeBull's CEO claimed their clearinghouse told them to stop selling these securities (no mention of deposit requirements). If they really weren't even given an option to deposit more, that seems to me to be an abuse of power by the clearinghouse.
Finally, was the DTCC not having the long side cover the risk on the short side? It seems to me, the vast majority of the risk was on the shorts. The short side seemed to be made up of mostly large hedge funds, so if one went down, it would have been extremely difficult for the DTCC to front the cash on all of their trades, and of course shorting has infinite risk. The long side was finite, was distributed among multiple brokers and then even more distributed among retail investors. It seems like the risk was low there.
It's obvious from RHs statement that they are stuck between the DTCC and customers. They are not willing to call out the DTCC because they are fully at the mercy of it. So they are trying their best to be positive and forward looking, trying to offer help to rally around something totally outside their control (real time settlements).
What is your source for this?
DTCC collateral requirements are calculated using, more or less, a fixed, predictable formula. And the DTCC isn't the ultimate creditor in these arrangements. They are drawing on lines of credit from banks, who are ultimately taking the credit risk of the collateral being insufficient for settlement.
RH negotiated with them all Thursday last week and reduced the required payment from $3B to ~$0.7B. So it sure seems like the DTCC made an arbitrary decision to jack up systemic safety cushion that resulted in the RH clients turning very sour.
(PROCEDURE XV)
288
II. if the absolute value of the largest non-index position in the portfolio
represents more than 30 percent of the value of the entire portfolio (the
“concentration threshold”), an amount determined by multiplying the gross
market value of such position by a percentage designated by the
Corporation, which percentage shall be not less than 10 percent. Such
percentage shall be determined by selecting the largest of the 1st and
99th percentiles of three-day returns of a composite set of equities, using
a look-back period of not less than 10 years that includes a one-year
stress period,2 and then rounding the result up to the nearest whole
percentage.
The concentration threshold would be no more than 30 percent, and would
be determined by the Corporation from time to time and calibrated based
on the portfolio’s backtesting results during a time period of not less than
the previous 12 months.
I'll chalk this up to colloquialism. The DTCC has very little discretion in what they do. That's why they're trusted to do it.
The "opinion" component could be a reference to their line of credit banks, who adjust the rates they charge the DTCC based on their varied risk models. There is a valid argument that there isn't as much transparency in that layer as there could be. But that isn't relevant to this case.
Any off-the-shelf collateral cost estimation tool should have told you, given GME's realized volatility in the week prior to the fiasco, that it was a high clearing risk. If the CEO is getting blindsided by the DTCC at 3AM, it's a oversight of internal controls.
> RH negotiated with them all Thursday last week and reduced the required payment from $3B to ~$0.7B
Negotiating collateral requirements involves netting out trades and delaying settlement on some trades and accelerating settlement on others. It does not involve recomputing collateral rules. (The DTCC can't recompute collateral rules for one member over another.)
In his chat with Elon Musk, the RH CEO said that Robinhood was given the $3B bill at 3am in the morning, and got it down to $0.7B after saying they would only allow closing out of positions for "meme stocks".
By his own words, RH took the first step to "change the game", which I am not really seeing discussion of anywhere. The DTCC certainly did not change any rules for them, but this still feels unprecedented.
People keep referring to a super transparent formula, yet nobody has actually been able to point me to what this formula actually is.
Seems quite opaque to me, actually.
https://mobile.twitter.com/KralcTrebor/status/13551753956420...
It seems that they used this right by the fact that Robinhood was able to negotiate their deposit [0]. The DTCC demanded $3 billion. Robinhood negotiated down to $1.4 billion. If done by the formula, how is this possible?
[0]: https://www.cnbc.com/2021/02/01/elon-musk-on-clubhouse-robin...
Netting out trades.
It’s like the “smart guy” having an insightful moment in a sci-fi movie: “I got it, we’ll use gravity assist!” Astrophysics 101.
"Less" might be accurate, given there's apparently a subjective multiplier. https://www.youtube.com/watch?v=2M7X2dsW_Xw&t=5m25s
The CEO of the biggest brokerage company says he has halted the "buy" side because it wanted to protect his clients(hedge funds) and his money and it will resume the trading when the prices reaches $17. If you dig deeper you may find that the DTCC/clearinghouses may have a vested interest in a specific position as their investors may be invested in that position (i.e. short).
Of course there might have been just a risk management issue and no collusion but in practice and in essence as well this was just a way to save the hedge funds(the client)'s money and ripoff the retailers(the product).
I am not trying to say what Robinhood did was correct or that they have not done any mistakes. I am just saying that I am glad that companies like Robinhood exist because otherwise the entrenched players would have never taken any steps to innovate.
We were on T+3 a few years ago. Now we're on T+2. That wasn't the result of some whiny blog post, it was the result of gradual and careful operational improvements. There's a lot of work that goes on in the back and middle offices of those century-old companies.
It all comes down to making informed decisions. If you're just using RH for "playing around" with some surplus money, this lack of liquidity shouldn't be as important for you (as compared to, e.g., the ease of use, or low fees...). However, if you're using RH in a "serious" capacity, this (reliability) should definitely be something to seriously consider, since you may not have the guarantees that you can take for granted with traditional players.
The true problem with the RH situation is the lack of transparency throughout. It really does no good (and comes off as very "slimy") if third parties have to expose their business model or why they're having issues. A little transparency would have gone a long way for people to be sympathetic to the startup. But then again, I guess that harms the "magic" factor of a startup.
The guy who allowed his service to store passwords as plaintext[1] says “There is no reason why the greatest financial system the world has ever seen cannot settle trades in real time.” -- pardon my fucking skepticism of the deep technical knowledge he must possess to make such a bold assertion
[1] https://techcrunch.com/2019/07/24/robinhood-stored-passwords...
“That same week, Robinhood released software that erroneously reversed the direction of customer trades, which meant that a bet on a stock going up was turned into a bet that it would go down. Mr. Tenev oversaw technology.
Technological issues continued piling up. In 2019, customers discovered that Robinhood’s software accidentally allowed them to borrow almost infinite amounts of money to multiply their stock bets. Last March, as the pandemic hit the United States and the stock market gyrated wildly, Robinhood’s app seized up for almost two days, leading some customers to lose more than $1 million.”
I like disruptive businesses. But sometimes I think SV fetishizes the “move fast and break things” mantra without understanding that it may sound cool without appropriately acknowledging the risk it brings.
I’m sometimes labeled as a codger but it makes me cringe when people espouse that attitude on projects that can ruin someone’s livelihood let alone on safety critical code that can end someone’s life
The biggest reason is that none of those world class institutions can actually build a functioning smartphone app
As I made clear, I clearly do value UI/UX and I'm not some old person making trades over the phone (I'm 24, directly in the Robinhood demo). What I'm saying is that in this specific use case, it's not nearly as important as correctness/reliability, which Robinhood has a terrible history with. An improved UI could be a factor that would draw me away, but there are simply more important things when it comes to where to bank my savings.
Again, the point here is that there's not a huge gap that people seem to try to say there is. They have a fully working website, apps, etc. They're regularly updated and all, see UI refreshes, the usual. Trading may take 4 clicks instead of two, but it's just so much more minor than people claim.
> if these companies don't evolve they are going to keep losing younger millennials and beyond to Robinhood as time goes on
Maybe to other companies, but I think Robinhood may never recover from this. Whoever does draw these away will have to offer bank-level correctness standards in addition to the nice UX. I'd be willing to bet Robinhood had a steady stream of bigger players leaving the platform as they got older because the product is optimized for new investors, not long term financial management. Maybe that niche of new investors is all they need, but their UX won't keep those who age/grow out of that type of user IMO.
Nor does it have a particularly nice UI, unlike Robinhood. That might be a plus (doesn't gamify it) but it is an inferior UI.
Sure it’s not gamified or meme-ready but maybe “investing your life savings” as a category shouldn’t be?
the way i think about it is vanguard works fine (theres some bugs but not end of the world). but it is not optimized for timed trades. it works well enough for me to put in a big chunk of money on a recurring basis or liquidate funds for use elsewhere.
robinhood allows me to easily trade off of market emotion or do options trading.
they serve two very different markets. if i tried to trade options using vanguard i'd probably want to throw my phone against the wall.
This is isn’t “democratizing finance”. It’s literally just a wealth transfer from the poor to the rich. It’s putting fish at a poker table full of professional sharks backed by billions of dollars and teams of analysts, and encouraging the fish to put their life’s savings on table.
Index funds are boring as fuck, but have done more to put market returns in the hands of the average member of the public than anything in the history of finance.
I’m not saying people who want to shouldn’t be allowed to trade options. But putting the ability in the hands of anyone who has zero financial experience but can download an app isn’t helping things.
The other apps may not be quite as easy to use for someone who has never traded before, but the basics of trading and options have been democratized enough that it is probably no longer enough of a moat.
It may be 'excellent' relative to competitors in "shitty old financial company app" space, but it is in no way excellent compared to a high quality phone app.
Robinhood is successful because their software is actually good. My bullish case for them would be them leveraging this capability as a way in to becoming a Fidelity sized financial competitor.
Their CEO's inability to honestly communicate with the public is hurting them though. He should have lead with their liquidity clearing house issues and directly addressed the apparent conflict of interest. He appears to either be unwilling or incapable of doing this.
They've now after the fact explained some of the clearing house issues, but they still act as if they don't understand the conflict of interest question. Just address it directly.
When Elon asked him about it he should have said something like, "I can see why people would think we'd be under pressure from the funds that buy our order flow, but we live and die by our retail reputation and would not risk that to illegally coordinate with these funds. We'd go direct to our retail customers first. That said, we were not asked to do what we did or pressured by them, we had to make choices on the fly to stay liquid and in that craziness I failed to communicate what we were doing in real time to our users - that was my failure".
Instead he mostly dodged the substantive question and came across as full of shit (only addressing the narrow aspects not really in dispute). I think this could be the truth, but when paired with him lying on TV about their liquidity issues it leads me to distrust him, and by extension the company.
I suspect the reality is something in the middle, considering what RH's customers (the funds) would want, fear of mentioning their liquidity issue causing a run, and the clearing house concern. He handled this poorly.
Re: Fidelity, by excellent I mean: it does what I want it to do, and the UI is clear enough. To be fair, I'm an infrequent trader who mainly uses Fidelity for banking, so I don't spend much time on the app. I'm also willing to sacrifice UI flashiness for a functional service that doesn't block me from trading when I do.
[ETA: I believe there's a lot to be said, and has been said, for ugly functional UIs that outlast fancier competition. The archetype is craigslist]
I’d argue Craigslist’s design is ugly, but quite good - it’s dense/high bandwidth, does exactly what people want without fluff. It’s fast. They also benefit a lot from network effects, but even ignoring that I think the website does a pretty good job doing what it's supposed to and is easy to use.
Fidelity is ugly and bad. Hundreds of hidden menus. Many things can’t be done via the app. Some actions require a phone call. Options trading sucks.
For an example, I wanted to wire my rent. The place to do this is via transfers.
Specifically: Transfer -> to bank account -> that I do not own.
That’s the flow to wire money to an external person. It’s not obvious and buried and it can only be done on a desktop.
Automated deposits are similarly cumbersome.
The app is also quite slow and the login flow is painful.
What Robinhood did was to lie about their execution. They claimed their trade prices were as low as other brokerages, while in fact being much worse. SEC penalized them for (1) intentionally misleading customers and, in the words of the press release, (2) "failing to satisfy its duty to seek the best reasonably available terms to execute customer orders".
Unlike Robinhood, Schwab, Fidelity, and TDA all have popular real-time trading platforms where order execution quality is crucial.
Robinhood lied and should be punished but they were penalized for doing so before other brokers had gone to $0. It remains to be seen what happens at the other brokers now that they are free.
If you've traded the same listed securities frequently on various platforms, you certainly can. In terms of speed, PFOF systems can hang on to limit orders that are marketable (ie they cross NBBO), technically not printing them outside the confines but taking their sweet time to make a decision about whether to cross the order or post it to an exchange. And once it goes to an exchange, you can also get a feel for how much of the displayed bid or offer you get on one platform versus another.
Nanex made a bit of a cottage industry whistleblowing on that sort complaint.
It wouldn’t have been an issue if Robinhood had been upfront about their pricing. They still would have been a good deal for many retail investors, but they instead chose to lie.
That is the best execution obligations of your broker.
In RH case, their intermediary bought at the better price and resold it to you at your ask, keeping the difference.
In any case, terrible advice to be repeating in the context of retail trades.
Have you actually placed a limit orders? Do you practice this advice with your own $’s? Do you know how much taxes you pay for a trade considered day trading? If the limit order is executed same day it is considered day trading. What is the point then?
Why retail investors are penalted for that but hedge funds are not? Are you retail trader or on the other side of the table? If so why you are giving advice to retail investors? The motivations? When I used to follow the pundits “advice” they were always wrong - limited orders were immediately executed. These “fluctuations “ causing execution of limit orders are never reported in the historical data . I used to purchase historical data for thousand $’s and never found these fluctuations in the official dat I saw on the screen. Meaning you can never rely on historical data for analysis. If you had the same experience you would know. Learning from practice I’ve different way of making $’s.
You place a limit buy order at $10.55 for 100 shares.
$0 commission broker that sells order flow: Your order is routed to the market maker buying your broker's order flow. They sell you the 100 shares for $10.55 since it's within your limit and within the NBBO spread.
$5 commission broker: Your broker attempts to price improve by searching multiple liquidity sources and gets a hit at the NBBO midpoint: $10.50.
In both cases you paid $5 for the trade.
Open to corrections
> they still dont have any obligation to improve your price beyond NBBO
But those that do price improvement use it as a marketing differentiator:
https://www.fidelity.com/learning-center/tools-demos/trading...
https://investor.vanguard.com/investing/online-trading/order...
https://www.schwab.com/execution-quality
https://www.tdameritrade.com/tools-and-platforms/order-execu...
https://www1.interactivebrokers.com/en/index.php?f=47202#bes...
If you don't allow that, and only let people trade on a cash basis after the trades have been settled, you effectively have 100% of the money you need to settle the trades you closed.
But, plenty of other brokers had the same issue. Including Merrill for instance. I would say that the more concerning issue that this has highlighted is how this part of the system gives large institutions greater access to markets than retail investors get. Addressing a systemic flaw like this seems like the best possible thing that could come out of this controversy.
The only reason robinhood has liquidity issues is because of T+2 settlement.
I mean why should a broker app need to have liquidity at all. Why restrict the ability to make this type of business to companies with a lot of capital.
I can also perform trades and instantly have access to the money on my TDA account.
Both of which are better for the consumer.
Clearing crypto doesn't require debt because your broker directly sends the TX on chain.
Doing the same with cash would require sending trucks of cash to their various clients banks throughout the day and would be prohibitely expensive.
That's why clearing was invented. I.e. having the bigger banks lending to the smaller and allowing to delay the actual exchange. (And hopefully never having to actually move cash since balance fluctuations between banks tends to be cyclical)
Banks don't actually shuttle physical dollars back and forth as most transfer via SWIFT. The physical money banks need is only for teller withdrawals, ATMs or whatnot.
The clearing problem is really at its core about avoiding to move cash and how to transfer debt between two entities that don't know (and trust) each other, as far fetched as it sounds.
When you transfer $1 to a friend of yours that is at another bank, your bank owes you one less dollar and your friend's bank owe him one more. But aginst what? The promise by your bank to pay it with a physical dollar (or some other better debt) in the future. But if you are with a small bank, your friend's bank might not trust it. So the they use a bigger bank that both trust that act as an intermediary and that lends for a very small rate as it is a 100% collateralized debt. This is the definition of clearing.
If I sell my Bitcoin on Coinbase, I instantly get the funds in my checking account? Because that's what real-time settlement means.
Blockchains dramatically simplify the clearing part of the equation. That simplification comes with costs, however.
[1] https://cdn.robinhood.com/assets/robinhood/legal/Customer%20...
(I don't have a good feel for what was the bigger driver of RH's issues though: overextension because of slow ACH or slow trade settlement.)
You can't use customer B's money (this is a key assumption that might be missing - it's all about the use of other customers money) for that collateral because, well, that collateral might not get returned in certain cases - that's kind of the point of having a collateral. You'd lose that collateral if the counterparty goes belly up (insolvency, fraud, whatever), and, most importantly, you'd lose that collateral if you become insolvent. That's not OK - this is regulated so that you are required to ensure separation of "your money" from "customers money that you're holding on their behalf", so that the customer's money is untouched and unclaimed even you go bankrupt. It's not your money, it's the customer's money that you're investing on their behalf, so you can't put it up as repayment or collateral for your liabilities; and you can't put one customer's money as repayment or collateral for another customer's liabilities.
And even same day settlement after close of markets plus instant bank transfers would have completely avoided all this.
I commented as such the other day. I really want this to spur a move to real time bank transfers instead of ACH.
Can someone explain what it took to move from T+3 settlement to T+2?
Why did they not go from T+3 to T+1?
Can clearing be real-time (or near real-time) with settlement happening overnight? Or do they need to be in sync?
But I think the main reason for these changes being slow to occur is because noone wanted to break the system in the process - the settlement process for share trades in the US is/was viewed as quite fragile due to the way it had evolved over time.
T+1 means overnight (options settle this way), so T+2 gives everyone in the world (sometimes you trade from one region for a legal entity in another) a little more than a full business day to tie everything out.
I see delayed settlement as part of the reason why we are able to trade instantaneously; execute first and address the details later.
EDIT: Also, the way equity trades presently clear is based on a net short and a net long, rather than breaking out individual trades as would be necessary for instantaneous execution.
If some participants want to stay slow, bear more risk, require more capital, etc... let them. But the rest of the financial system shouldn't be held back because of them.
Time for instantaneous settlement, across the board.
This will never happen if we leave it to banks, exchanges, clearing houses and the rest (some of them even have a vested interest in it not happening). This is one of the clearest use cases for blockchains [1]. It answers the problem of how next gen financial infrastructure will get built, and frankly the savings and benefits to be had are astronimical.
[1] These will probably be public blockchains, but it's possible a "proof of authority" real time settlement chain or similar operated by a consortium could work, too, as an interim step/for some cases
My observation is based on over a decade working on trading and settlement systems at multiple major international banks, exchanges.
The infra is creaking at the sides, it is too expensive to fix individually. We're talking hundreds of millions, even billions, at every institution, that they internally decide, repeatedly, that they cannot spend. Every so often a bunch of them try and work out how to build an industry utility for faster, better settlement but can never get past the politics. So it won't change in a big way, not from the current vantage point.
But the world is changing. More countries and industries getting into the financial system, changing retail demand, more complexity for small businesses working internationally, etc... so I don't think it ends with "it's too hard to properly fix this" so let's not.
I am pretty convinced at this point that the world will fix it, as I've described, but from very different starting points to major New York and London institutions, and they'll drag the rest of the industry kicking and screaming along with them at some point... once there's money to be there in size, the big banks and funds will follow.
1) the contract
2) the paying of the money
There are ancillary bits as well like unwinding of mistakes.
The problem is this, moving money fast is hard. It can be done, but its far cheaper to settle up at the end of the day, when the total inflow/outflow is calculated.
But crucially there isn't enough liquid capital to service this level of actual transaction.
What changed was Citadel (who is actually Robinhood's customer, not the retail investors) and Silver Lake making a bunch of money off retail investors while a lot of people who bought in at the top are going to be fleeced.
No value was created in this process or valuable information exchanged. It's basically market-makers and other hedge funds benefiting from volatility caused by a stupid hedge fund and retail investors going crazy. And the reason Robinhood wants all that real-time trade so bad is because Citadel pays them for order flow, that is their actual business, not you trading on their app.
Or — what do you think are the bad consequences of “over shorting?”
https://www.sec.gov/news/press-release/2017-68-0
There are many types of securities that are already settling at T+0.
Equities clearing and settlement is done privately:
* https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...
If the members of the DTCC want to have it done faster, they'll request it. There's been talk, but it involves everyone agreeing to it and changing their internal workflows as well AFAICT.
> 'T' is the transaction date
If that's an accurate definition, then it's safe to say it would technically mean same day.
Simultaneously, if we want to be technically accurate to a pedantic level, "instant" would be impossible given speed limits of information transmission (speed of light), etc. So "T+0" couldn't mean "instant" in any case.
Maybe some settlements are, in fact, near-instant but I don't think that's implied by "T+0".
[0] https://www.investopedia.com/ask/answers/what-do-t1-t2-and-t...
RobinHood’s PR problems are entirely self-inflicted.
Tell that to Melvin Capital.
https://www.wsj.com/articles/citadel-point72-to-invest-2-75-...
I don’t really have a horse in this race, I am just trying to understand how it’s ok for them to put their thumb on the scale in this way and then say that they didn’t have enough collateral and someone that is retail investors’ problem.
And where the price is now is arguably the direct result of their actions. The price would be higher if they didn’t restrict buys while allowing hedge funds to gobble up the panicked sells from retail investors.
Judging by the sentiment on WSB it seems that this is far from over. Hedge funds have overshorted several stocks and those guys have figured out that if they simply buy up a large portion of the available stock they can name their price when the hedge funds need to buy to cover the shorts. It is of course impossible to quantify but casually looking at the posts, nobody is talking about selling GME at all, and every dip in price just means more retail investors can afford to buy into this. It’s a bubble for sure but it seems a lot of the users there are mostly interested in using it as a weapon against hedge funds more so than making money off it.
[0] https://www.reddit.com/r/wallstreetbets/comments/fcoaev/and_...
This is probably generally true but that investment behavior is not what drove their clearinghouse failure. I wish they would quit it with the fluffy rhetoric. Why doesn’t Robinhood understand that we want straight answers from them.
Something like the overnight rate banks charge each.
[1]: https://www.theverge.com/2021/1/27/22253251/discord-bans-the...
[2]: https://www.newsweek.com/facebook-robinhood-stock-traders-gr...
It would be great to see more details for the DTCC's increase in the amount of required collateral. I tried Googling for some info but didn't find much (probably haven't tried hard enough yet) ex [2].
Naively, what we saw was a failure of the financial system to support trades. It may not be Robinhood, but it may not necessarily be T+2 either.
Is there a website I can use to query the current deposit requirements for GME? Is it public info? Are there details provided for factors affecting that amount that can be compared across different stocks?
I'm a total noob please forgive my noob curiosities :)
[1]: https://blog.robinhood.com/news/2021/1/29/what-happened-this...
[2]: https://dtcclearning.com/products-and-services/settlement/se...
"When you hear hoofbeats, think of horses, not zebras." A massively orchestrated conspiracy requires a lot of assumptions and so probably violates the razor.
Settlement cycles and market censorship are two separate things. It's on robinhood to make sure they can meet the same liquidity standards that banks have been "stress tested" for ever since 2008. Keep in mind that it wasn't 3 years ago where T+2 was just a dream.
Real time settlement is going to be driven by centrally governed organizations and their market counterparts (DTCC / SWIFT).
Uh, what? We were already on T+2 three years ago (which was Feb 2018 by my calculations).
One is the payment capability of the customer to pay RH when the purchase is settled (T+2).
The other is the relationship and payment capability of RH to the clearing house (DTCC) for its orders that it has placed with other brokers.
RH is required, as a broker, to provide its own collateral to the clearing house so that the clearing house can guarantee to other brokers that all their trades will be settled at T+2.
RH is not allowed by law to use their customers' money as collateral to DTCC. If RH goes broke, then DTCC does the following:
a) takes all their collateral and uses it to make the other brokers good on their trades (which makes the counterparties good on the trade) b) takes the customers money and uses it to complete the trades (which makes the customers good on their trade).
RH is left to be picked apart.
That's the purpose of the clearinghouse.
I still can’t find an authoritative citation for this, and it seems seems like poor design to me.
Suppose Robinhood has one customer. That customer opens a cash trading account, deposits $1bn into it, waits for the deposit to clear and waits an extra week for good measure, and then uses all $1bn to buy an absurdly volatile stock.
Now, between the execution of the trade and settlement, Robinhood is apparently holding $1bn (in a segregated account?), and Robinhood needs to post some largish fraction of $1bn with their clearer to offset the risk that Robinhood fails to pay the $1bn at settlement.
To me, this seems like un unreasonable requirement for Robinhood. If their actually go bust before settlement, they owe DTCC, etc $1bn, the customer has $1bn deposited (in the same segregated account), and the customer is owed some number of shares of the stock. All the money is there!
So why can’t Robinhood satisfy its clearing fund requirement by putting the appropriate fraction (or even all) of the customer’s $1bn into segregated account with its clearer? After all, the mere fact that Robinhood has a whale for a client does not mean they are any more likely to go bust, except for the fact that “bust” seems to include this odd case where Robinhood can’t independently secure its customer’s trade.
Separately, when someone with Robinhood Gold buys shares on margin, that purchase is financed in part with Robinhood's funds. Look up "initial margin" and "maintenance margin" to understand why. This involves some risk for Robinhood, because assets can sometimes lose value faster than Robinhood can sell them to preserve its equity.
Finally, Robinhood is a clearing member and has to put up money as insurance to keep the clearinghouses capitalized in case some bad juju goes down in the markets and Robinhood hits the skids.
1) Custom initiates $300 purchase of some stock.
2) RH sends customer's $300 to counterparty.
3) After receiving the $300 and before delivering stock to RH, counterparty goes belly up.
Forbidding RH to use customer funds in that manner prevents that race condition.
In any case, I think it would be entirely ridiculous for one’s stock broker to front the entire purchase price for each and every stock purchase to secure customers against counterparties who might take the money and not deliver the stock. This would involve the broker coming up with 100% of the price, not merely an amount related to the anticipated worst-case P&L.
[0] https://www.cls-group.com/ In this particular instance, I do know what I’m talking about. The story of Herstatt Bank is fascinating.
Why not? In most cases share ownership is just a row or two in some database. If you can update those in real time (which you should; a legacy system that doesn't support this can be upgraded, even if at significant cost in implementation and testing), and do instant (or near-instant) funds transfers, you should be able to settle within minutes. Certainly same-day, at least.
Now, I would accept that maybe instant settlement is not desirable. Maybe it's good to be able to reverse fraudulent or illegal trades before money fully changes hands, for example. But that's a different thing.
And non-malicious errors are reversible.
The collateral call had nothing to do with Robinhood’s ability to pay for the orders it was placing.
The problem was the GME short sellers were insolvent at the prices the stock was trading at, and contagion from the hedges failing would have left the clearinghouse looking at billions in loses.
Robinhood didn't get extorted, their clearinghouse told them they needed more capital to secure further $GME trades, because the volatility has been off the charts.
Vlad even states this in the article!
> Clearinghouse deposit requirements skyrocketed overnight
...
> The clearinghouse deposit requirements are designed to mitigate risk
If we're going to be all "free market" about how only the strong survive, RH should be eliminated.
The CH is faced with two options: One, make the statement and hurt a public reputation they don't care about in the first place. Or they could cut off all trading to RH, which puts RH on the same side of the fight as they have been trying to market themselves as being on from the beginning. Win win.
And financial firms don’t go j to extended bankruptcies when they run out of cash like other companies. They immediately go into receivership and/or liquidation. Trying to play chicken with the CH would have just ended RH as a company pretty much immediately.
First off, what do you mean by "Robinhood's most recent miserable failure"? The story as I know it: WSB pumped up GME, somebody (Melvin's Capital) majorly fucked up and lost money, somebody (Blackrock, Citadel, some lucky traders) gained something from the situation, basically, business as usual. Then Robinhood screwed over it's customers, by forbidding them to perform some operations, motives for which remain questionable and may result in a prosecution (because of affiliation with Citadel), but AFAIK that's very theoretical and right now Robinhood didn't really suffer any loss.
None of this really fits the description of "miserable failure" on Robinhood's part, as far as I can tell. So what do you mean? Am I missing some details?
Is he blaming T+2 for forcing him/Robinhood to prevent users to buy stock? How so?
Second, I still don't quite understand what T+2 means. All trades look instantaneous to every particular seller (including all Robinhood clients), right? Also, all trades are recorded by a centralized entity (NYSE), so there also cannot be any disagreement between brokers about how much who owes whom. Actual money/securities movement between brokers is T+2, but in the essence that is just some bureaucratic bullshit, and shouldn't affect broker's clients' (including all Robinhood users) ability to buy stock, right? Also, whatever the current regulations are, Robinhood somehow performed under them until now, so it somehow managed to meet whatever clearinghouse requires of them, right?
So, in the essence, I still don't understand what the fuss is about, and how Tenev could possibly blame T+2 for anything (which, btw, I don't see him explicitly do: he doesn't say that it was because of some clearinghouse requirements he was forced suddenly to shut down free trade of stock on his platform, does he?)
I mean "failure" in the literal sense. It's not a particularly reliable brokerage.
"FINRA said in a statement that the brokerage failed to make sure clients were getting the most favorable prices possible from October 2016 to November 2017." (19 Dec 2019)
https://qz.com/1772017/robinhood-fined-1-25-million-by-finra...
"As Robinhood's stock-trading app failed, the company was maxing out its credit" (10 Mar 2020)
https://www.latimes.com/business/story/2020-03-10/robinhood-...
"failing to satisfy its duty to seek the best reasonably available terms to execute customer orders" (17 Dec 2020)
https://www.cnn.com/2020/12/17/investing/robinhood-sec-settl...
> Is he blaming T+2 for forcing him/Robinhood to prevent users to buy stock? How so?
In a sense, he's blaming T+2 for tying up his firm's money, which his firm uses to make margin loans and put up collateral.
> I still don't quite understand what T+2 means
It means that if I buy stock from you today, I pay you (and you give me the shares) in two days' time. The trade is instantaneous but its settlement (where we actually exchange the goods for the dough) is not. That transaction is carried out through a clearinghouse.
> all trades are recorded by a centralized entity (NYSE)
NYSE is one stock exchange. It doesn't record all the trades. Look up DTC and NSCC.
T+0 would enable the Robinhoods of the world. Are the big players and the regulators they've captured and the legislators they've paid for interested in enabling Robinhood et al. after the events of last week?
DOA.
When things were delivered by horse, it was T+14, we are now down to T+2 for stocks and bonds (mostly anything related to private industry), T+1 for options and government stuff, and T+0 for futures. Everything is pointing at eventually everything being T+0.
I'll repeat, Robinhoods are welcome, especially if they do dumb things like this GME debacle. I expect the big players to lobby for relaxed margin requirements so that they can let retail lose their shirts like the 1930's while they profit by taking the smarter side of trades and insulate themselves by letting the Robinhoods fail in case of market failures.
I cannot speak for all of the engineering that goes down at Robinhood, but the way their web-based trading interface performed for me was regrettable at best. Never was able to load my history in that interface without my browser getting javascript timeout warnings. Always had to go back to my phone to see what dividends I got paid out. This sort of problem, which strongly-encouraged me to switch to a different broker, does not give me much confidence that other areas of engineering at Robinhood are handled much better.
Maybe someone with more knowledge of the situation will correct me though. I think there can be counterparty risk issues (eg during the 2008 crash) that are removed by immediate clearing/settlement.
Can you post a link? I know they moved from T+3 to T+2 in 2014, but doing a quick search doesn't reveal any T+0.
Robinhood please bring options on cme bitcoin futures to the masses.
In forth semester of computer science, I toyed around with Bitcoin (2014?). A client had asked me to build a crypto exchange and so I faced the problem of when to credit a user Bitcoin that they sent to exchange-generated addresses.
Turns out the whitepaper specifically addressed this problem and by waiting 6 blocks, Bitcoin was designed to have such low probability of a chain reorganization that I was safely settled (finality in 60mins).
That's how I built it, and it's also the way that 99% of centralized exchanges operate today.
https://www.finextra.com/finextra-downloads/newsdocs/embraci...
Edit: No clue why this is downvoted.
As a side note, we need a defined unit for the quantity of hiptech in a software project. I propose one AI (= 100 Microservices).