I'm not buying it. Lots of other brokers also did the same. I think RH were the first. I find it hard to believe this move wasn't coordinated in some fashion.
Some (e.g. TD A) imposed increased margin requirements, but that's perfectly normal for high volatility stocks or options in margin accounts, and to be honest I'm amazed it didn't happen sooner.
This comes down to those brokers that are their own clearing house versus those brokers that rely on a company like Apex.
It looks like Robinhood, Webull, IBKR, and others, all ran into the same capital requirements issues as their customers loaded up on a high value, high volatility stock. Their clearing houses basically told them they had to pony up more cash, or they had to stop allowing customers to increase their positions.
So this was "coordinated" insofar as they all used a clearing house (I believe RH and Webull both use Apex, but don't quote me on that) that made what amounts to a margin call on the brokerage.
To be clear, this should not have happened. It's entirely a function of the companies being under-capitalized as a result of inadequate risk management practices in this very strange market environment.
Ah, yup, I stand corrected, they moved off of Apex. I told you not to quote me on that! ;)
Nevertheless, they still have capital requirements they have to adhere to in order to ensure settlement can occur, and it appears they were on the verge of being unable to meet those requirements.
> They allowed people to sell; you can't sell unless there's a buyer.
There are many other exchanges. The buy side of those sells might be on TD Ameritrade or Schwab or other brokerages where purchases were still allowed, not to mention institutional buyers looking to hedge calls or cover short positions.
What this prevented was RH customers specifically loading up on more stock.
I think your confusion might be thinking "they" all blocked buys, but that couldn't be further from the truth. A couple of brokerages blocked buys, but the majority did not.
