An exploited glitch and a presumptuous Reddit thread…What could possibly go wrong?
Money cheat code. Robinhood was incorrectly allowing traders to inflate account balances. This cheat code let some people trade with infinite money.
- While most took big losses, the one trader flipped $3,000 to $1.7 million.
SMH. It’s not yet clear what will happen to the glitch traders, but some law professors see it as a securities fraud case.
How Does it Affect My Wallet?
Margin Trading. As humorous as this story is, there’s actually an educational takeaway… Besides not using glitches on exchanges.
- Discretion is advised. Margin trading is when you borrow money from your stock brokerage to increase the size of your investments.
- It makes your gains (and losses) bigger.
Rob(b)in’ bank accounts. Regular Robinhood trades are charge-free, but you pay monthly fees with $2000-minimum margin trading accounts.
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