>Robinhood is struggling for capital, so I wouldn't trust them with my cash whatsoever.

Why not? You're protected by SIPC for up to $500k (for securities) and $250k (for cash).

SIPC pays out eventually. If you routinely withdraw money from your brokerage account to pay for expenses or are doing anything fancy with options, you may not want to twiddle your thumbs for months while the bankruptcy court chews things over.

https://www.sipc.org/for-investors/investor-faqs

>Once a customer claim is filed, the trustee will research and analyze the claim and then mail to the claimant a written determination either allowing or disallowing the claim. If the claim is allowed, the trustee will satisfy the claim through the distribution to the claimant of “customer property” or advances from SIPC, or some combination of the two.

>How quickly claims are satisfied depends on the complexity of the liquidation and the condition of the failed brokerage firm’s records. Delays of several months can arise when the firms’ records are not accurate or incomplete. It also is not uncommon for delays to take place when the brokerage firm or its principals were involved in misconduct. When the records of the brokerage firm are accurate, and no misconduct occurred, deliveries of some securities and cash to customers may begin shortly after the Trustee receives completed claim forms from customers. Generally, in these cases, customers may receive at least some of their property one to three months after filing a completed claim form.

Not sure about SIPC but the FDIC usually gets involved before the bank actually goes insolvent and helps find a plan to keep the accounts active the whole time (eg sell to bigger bank without insolvency issues). Very rare to reach the point of people needing to file a claim.

Anyways i don’t know how SIPC works but I bet it’s similar. Also if Robinhood can go under then so can lots of other neobanks so I’d be worried about money in all those accounts.

>Why not? You're protected by SIPC for up to $500k (for securities) and $250k (for cash).

Presumably there's some delay in the recovery process during which you cannot access or trade your assets. Crypto is also explicitly not covered.

You actually want to have to rely on insurance? I would hope that my brokerage can at least stay solvent ffs.

>Aren’t they selling the order flow of retail traders?

...and getting price improvements. See: https://news.ycombinator.com/item?id=32325223. I don't see the issue here.

What's wrong with selling your orders to a market maker? You get a better price.

other brokers do too..

agreed - had $50K in investments (I admit, it’s small fish). Transferred that to another brokerage following the GME sell button fiasco. Although in retrospect, I probably should have switched sooner than that

I wasn't involved at all with GameStop, but it was enough for me to switch. Schwab's app isn't as modern, but I have a lot more faith in them.

I transferred everything out of Robinhood just this month. So long!