
Robinhood reports outage as markets rebound - anamexis
https://www.axios.com/robinhood-outage-stock-market-fbd81363-eb83-424f-8591-1bd4012a2c4f.html
======
elwell
Being down for an entire trading day is pretty crazy. I can't imagine what's
going over there today in the engineering & devops teams. Depending on where
the issue is, there might be thousands+ of orders to reconcile (manually?). It
will be really interesting to read a post-mortem engineering blog post if they
make one.

~~~
intuitionist
They don’t seem like serious enough professionals to release a postmortem. Did
they do so for the “infinite leverage” bug?

I have a couple grand in play money in Robinhood, because hey, zero
commissions, but it’s clearly not sustainable for the long term. I’m glad my
real investments are all safely parked at Vanguard, where I likely wouldn’t
even notice if the brokerage seized up for a day.

~~~
manigandham
The business model is perfectly sustainable and the same as all the other
brokers. Commissions were purely extra income.

The problem is that Robinhood is a young tech company and the "move fast and
break things" approach doesn't work when it comes to industries that need
reliability and risk management.

I'm surprised they got away unscathed from the lack of proper margin
calculations before. That should've led to major fines.

~~~
intuitionist
Ah, sure, this is what I meant by it not being sustainable. They keep fucking
up in standard SV ways, eventually FINRA or maybe even the SEC will come down
hard. The basic brokerage business seems fine.

------
halotrope
Apparently leap day is the cause:
[https://mobile.twitter.com/jtech63/status/123460004578739404...](https://mobile.twitter.com/jtech63/status/1234600045787394048)

Also rumor has it they “lost user data and the backups are not working as
expected”

Edit: This is the tweet. Not sure if it is legit:
[https://mobile.twitter.com/classrobinhood/status/12345774264...](https://mobile.twitter.com/classrobinhood/status/1234577426488811520)

~~~
vsareto
If this is true and nothing happens to this company, everyone should feel free
to use bugs to cover up any and all IT negligence.

~~~
halotrope
I doubt it will be possible to just shake it off as there is likely millions
of dollars lost for customers. Not in some abstract way like when github goes
down but literally because people cannot close out positions and options
expire. If it is really just a leap year bug It should be gross negligence.
Not sure if their TOS will hold then.

------
glouwbug
Guess they weren't ready for the massive amounts of requests coming from a
world record market correction / recession. That, or they released a bunch of
new features over the weekend.

Why we are building highly sensitive monetary performance based applications
under the guise of agile and electron is beyond me.

The app market needs a market correction in design. IEEE, military, aerospace,
or aviation design standardizing comes to mind.

~~~
pjc50
> Why we are building highly sensitive monetary performance based applications
> under the guise of agile and electron is beyond me.

It's cheaper.

This is not complicated. The entire society is orientated to getting the most
for least. Excessive effort in quality is a waste.

Besides, the "serious" people hardly fared better. The notorious TSB failure,
for example: [https://www.independent.co.uk/news/business/news/tsb-it-
fail...](https://www.independent.co.uk/news/business/news/tsb-it-failure-cost-
compensation-customers-switch-current-account-a8757821.html)

~~~
EpicEng
These guys just took $323 million in a series E. They're valued at 7.6B (well,
they were...) Can't afford better engineers?

~~~
yebyen
If they are down for one full day out of every 365, that's still a potential
ceiling of 99.726% uptime for the year. My home internet was down 14% of the
afternoon on Sunday this week, and on through the evening.

On a month-to-month basis, I can't even seem to crack 99% reliability. (Geez,
I should really call them on it, or perhaps get a new modem...)

Point is, how high is Comcast's valuation again exactly?

~~~
wasdfff
Your internet goes down, you can’t watch netflix. Boo hoo. Your brokerage goes
down, you can’t exit your positions, and, well, just look at the hundreds of
thousands of dollars lost on reddit today. People were using their student
loan money in their brokerage accounts. It really is a disaster.

~~~
apta
> People were using their student loan money in their brokerage accounts

Doesn't sound like the smartest thing to do.

~~~
pjc50
Reminder that the financial return maximising function for Robinhood benefits
far more from "unsophisticated investors put in their student loans" than
"service is up all the time". People who are actively trading, especially in
options, may well be losing money.

~~~
yebyen
This is largely my point. I live with <99% internet uptime and I have a Robin
Hood account. I only know about this outage because I read about it... feel
pretty sure that I am just like the majority of their customer base.

I don't check RH every day and I wouldn't have been compelled to check on it
at all yesterday except for the news (I'm losing money, who wants to look at
that! LOL)

------
sjc33
I just got an email from Robinhood support on the outage, half an hour before
markets close.

I don't actively use RH as my main brokerage so not a big deal to me, but
obviously this is unacceptable. Don't recall any other online brokerage
suffering an outage like this.

Suffice to say this throws cold water on any mystic around Robinhood having
better tech that any incumbent.

~~~
inferiorhuman
_Don 't recall any other online brokerage suffering an outage like this. _

Brokerage firms have outages with surprising regularity. I remember
Sharebuilder being particularly bad, but Vanguard was down for a bit last
week. A whole day though is pretty spectacular.

~~~
bostonfincs
Vanguard was down for 2 minutes that’s way different than a whole trading day.

~~~
inferiorhuman
Vanguard was down for around 30 minutes by my count with no status updates.

~~~
chance_state
No even in the same ballpark of fuckup as being down an entire trading day
will _zero_ information as to why.

------
beezle
I don't understand the attraction of Robinhood over the likes of TD or Etrade.
TD minimum balance is $50 (the minimum transfer) and Etrade $500. Both are
well vetted brokers with additional features and services.

If you are investing, how sexy the app is (if you only use a phone) shouldn't
matter. If you are day trading from a phone app (except in emergency), you
are, IMHO, delusional.

~~~
usaar333
Most people who believe they can profit day trading are delusional to begin
with.

If you are just doing it to gamble (for fun), a sexy app that lets you gamble
easier on the fly better can well be worth it.

------
ra7
They have been down basically the entire day. Are they going to face some
action? I'm unclear who even punishes them for potentially causing millions of
dollar losses for customers.

~~~
Willson50
The SEC does.

~~~
ra7
Pardon my ignorance, but what are SEC rules for things like this? Do they
expect some reasonable availability for trading platforms or do they consider
massive outages like this "negligence"?

~~~
turc1656
My limited understanding is that if you have a license to be a broker in this
nature, you have to meet certain requirements. Similar to getting a bank
charter - banks have to be open all standard business days during certain
hours. Things may happen from time to time that are unexpected - like a
massive snow storm that closes the bank for the day or at least part of the
day.

I imagine the rules are similar - you must be able to have your clients trade
during normal market hours. The regulators understand there can be unexpected
events that put systems down unexpectedly (high volume, bug that crashes the
system, etc.) and are generally pretty understanding. But I think something
like this where they are down the whole day (and STILL down from the looks of
their status page, though they claim to have identified the issue), could
easily earn them a fine from the regulators for not meeting the
license/charter requirements.

------
pfarnsworth
The biggest question is whether or not their systems were able to execute
margin calls. If they were down this long, that to me suggests data got
corrupt and they've been restoring from backups, etc, which means maybe all
their services were inactive. If that's the case then could the margin system
be active, or are people (and potentially RH) sitting on oversized losses if
they were short today? What happens tomorrow if their margins kick in and sell
at the open, and then the market drops? Lots of very interesting questions
that need to be answered.

~~~
Tiksi
I tried to clear all user data for RobinHood off my phone this morning and
login fresh. At first I got absolutely nothing, but eventually my stocks and
options came up, then my watchlist. However the watchlist was missing
everything I added to it yesterday, though if I look up a symbol directly it
does show as added. So I think your theory of restoring from backups has some
merit. I wonder how they'll reconcile any orders placed/executed after the
backup was taken if that's the case.

------
lwb
Aaaand, there's already a twitter account trying to build a class action
lawsuit against Robinhood for allowing an outage to happen. Wonder if this'll
go anywhere!
[https://twitter.com/ClassRobinhood](https://twitter.com/ClassRobinhood)

~~~
swamy_g
it's probably some law firm trying to see if they can get any $$$

~~~
lovecg
Well yeah, but you have to admit that a system that converts greed to
something approximating justice is not the worst idea.

------
ab_io
This is starting to look like a customer extinction level incident — Any idea
which competing service their users / wsb will likely move to?

~~~
ithinkinstereo
webull and thinkorswim will probably be the two biggest beneficiaries today.

~~~
nscalf
One of the biggest lessons here is not to use tech-forward brokers. I see a
lot of people talking about how swapping from robinhood to webull is
ridiculous, and I honestly agree. I'm personally thinking of going TD or
thinkorswim.

~~~
addcninblue
Note that thinkorswim is owned by TD, so it's effectively the same platform.

------
iask
As of 3:44PM EST. It’s still not back. I then signed out of the app and can’t
sign back in. I then thought maybe they reset passwords, so I tried resetting.
Even that’s not working. Total outage!

~~~
booleandilemma
Reset passwords? They’re not MoviePass :)

------
sjc33
My theory is that this was a leap year bug.

~~~
ceedan
Or because Sunday starts daylight savings time.

~~~
notyourday
That's next Sunday

------
cft
Somewhat related, they ruined their app for me last week by adding the
"lists". Instead of I instantly visible scrollable symbols I am interested in
trading, the app now presents a bunch of "expand" and "add new list" controls,
that when expanded show abridged lists with "click to see more". That totally
ruined its main differentiator as an "easy app". Additionally the update was
shoddy: due to a memory leak the scrolling eventually becomes very slow.

------
richardknop
Still down. Entire trading day outage.

------
henryw
Do they compensate their customers for this?

~~~
chatmasta
How would that work? If I’m holding a stock and it tanks while RH is down, why
wouldn’t I claim I was planning on selling it?

Now if I had a trade scheduled ahead of time to execute during the down time,
that seems like a more justifiable case for compensation.

------
leet_thow
If you want to glimpse the sentiment of their customers at the moment, check
out the thread at /r/wallstreetbets:
[https://www.reddit.com/r/wallstreetbets/comments/fcfuux/robi...](https://www.reddit.com/r/wallstreetbets/comments/fcfuux/robinhood_crash_megathread/)

------
haberdasher
[https://status.robinhood.com/](https://status.robinhood.com/)

------
Animats
At Robinhood, you're not the customer. You're the product.[1] Robinhood makes
their money by selling order flow to high-frequency traders. Robinhood doesn't
charge commissions, but the price is slightly worse.

[1] [https://seekingalpha.com/article/4212397-robinhood-high-
freq...](https://seekingalpha.com/article/4212397-robinhood-high-frequency-
trading-scandal-plot-thickens)

~~~
gmm1990
How do you think most brokerages fill orders? I'd rather get filled at the
best price possible, which I assume a high frequency firm would be able to do
better than some other filling method. Pretty sure most brokerages do this
anyway.

~~~
gmm1990
Sorry thinking about this more, I guess the actual best price at the stock
exchanges would be preferable

~~~
intuitionist
Reg NMS prevents HFTs from filling your order outside of the NBBO. if anything
you’ll get slightly _more_ favorable prices from a market maker, since they
know you’re a retail trader who’s not going to run them over.

~~~
gmm1990
Yeah that makes sense then. I have been using Robinhood cause I figured it
wouldn't matter anyway the latency differences between click trading and their
algos are so large. But I won't be after the outage today.

------
champagnepapi
I was getting ready to buy a bunch of calls this morning via Robinhood. I hit
the "submit" button on the trade, and nothing happened. VERY disappointing
experience. When it comes to applications like this, downtime is critical.
Haven't been able to place a trade all day.

------
rodgerd
What have /r/wallstreetbets done _this_ time?

~~~
strbean
They've been locked out of the market all day, and we get a big uptick.
Coincidence? /s

------
nostromo
Reading Reddit's WallStreetBets has been unintentionally hilarious.

[https://www.reddit.com/r/wallstreetbets/](https://www.reddit.com/r/wallstreetbets/)

Folks were leveraging up all last week and buying puts, thinking the market
was tanking to zero and we're all going to die of "beer virus" as they call it
-- and are getting a harsh lesson about timing the market today.

They’ve been giving so much leverage to broke young people, I wouldn’t even be
surprised to read that they’re insolvent someday after a big, unexpected move.

~~~
Der_Einzige
Long term puts (at least 2 weeks out) on the market are the safest investment
that you could possibly make. The market recovery today is a dead cat bounce.
Mark my words I guarantee you that I will be right about this

~~~
nostromo
Yes, always double down on a loss, that's the WSB way!

Or, you know, buy for the long term and ignore today's news.

------
syedrezaali
fuck you robinhood

------
syedrezaali
To the founders of Robinhood, FUCK YOU ALL, HOPE YA'LL PAY FOR THIS.

------
daenz
What are the odds that this was a cyberterrorism attack? If you can predict
this kind of market event (the bounce back), and you want to hurt a company
and its users, you would simply DDoS at the right time.

~~~
kaffeemitsahne
If you can predict this kind of market event I imagine you've got better
things to do.

~~~
sombremesa
Well, all you have to predict is that the market will move - the direction
wouldn't matter much, since the brokerage has customers trying to do both
calls and puts.

------
WrathOfJay
I remember when Schwab went down just as Facebook went public. Couldn't cancel
my order, ended up with the stock at a much higher price and the stock had
dropped by a lot by the time I had access again. I can't help but be
suspicious of events like this.

