March 28, 2024

A mistake in the Robinhood trading application allowed customers to leverage over 800x

Reddit users reported an anomaly in the application of the American stock trading platform andcrypto assets of Robinhood, which allowed customers to borrow huge amounts.

Recent Crash in Robinhood App for Tradingshares gave users the opportunity to abuse the function of margin trading and borrow up to $ 1.7 million, while having on the account no more than $ 2000. The leverage used by some traders was actually more than 800x, which is many times higher than the opportunities usually offered by exchanges.

Error news fast enoughspread on the Internet, Reddit users were among the first to notice the anomaly. One of them said that he was able to use margin trading to buy 100 shares of AMD, having only $ 3800.

After that, he sold the purchased shares andI returned the money, and then, taking into account the profits already received, I bought even more AMD shares. He repeated this process over and over again and used margin trading to maximize his profits.

Since the legality of such trade is underThe question remains is to wait for the reaction of the application creators and regulators. Users who abuse the glitch will likely not be able to cash out as transfers typically take a couple of days. It is unclear how the company will overcome this situation.

American stock trading platform andRobinhood received a license from the Financial Supervision Authority of Great Britain (FCA) to operate in the country in August. And in July, Robinhood announced the completion of the next round of financing, in which it received $ 323 million. The company's total capitalization reached $ 7.6 billion.

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