Self clearing broker - a receipy for disaster? Isn't it like self-audited business? Is this common? https://www.wealthmanagement.com/technology/robinhood-s-bumpy-transition
Sounds more like teething pains. Any broker with a decent scale wants to go self-clearing to reduce expenses. Clearly, Robinhood is all about keeping expenses low. Apex's predecessor - Penson - failed, mostly based on concentration issues.
The big money in self clearing is the banking side of the clearing. (Debit interest and stock loan) Since that is a big part of their revenue stream in addition to PFOF, self clearing makes sense for them.
I understand the cost reduction plus a better control of the process. But is there more likely hood of optionssellers.com scenerio than when there is independent clearing?
They can't lend out stock on fully paid accounts. Do they really do much on margin on their presumably average small size account?
in the daytrading domain, I think Hold Brothers was self clearing for a long time. Dunno if they still around.
Hold Brothers is a prop firm not a clearing member. They do not deal with customer accounts. They clear at ETC.
Hi Robert. I was with them for 1-2 years. I remember having the option of joining their prop firm (w 10:1 leverage) or opening a Reg T with 2:1 or 4:1 over $25,000. We are going way back.
I know they refer customer accounts to Cuttone an introducing broker. Look at their Finra Broker check.
https://www.sec.gov/news/press-release/2012-2012-197htm Hold Brothers hit with $5.9 mln in fines for trading violations https://in.reuters.com/article/holdbrothers-fine-idINL1E8KPE3H20120925