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Regarding Robinhood's buy orders
James Kayten
posted Aug 17, 2017

Reading through the contract I came across a few things that intereste me:

  1. "(J) Electronic Access.
    1) I am solely responsible for keeping My Account numbers and PINs confidential. “PINs” shall mean My username and password.
    2) I agree and accept full responsibility for monitoring and safeguarding My Accounts and access to My Accounts."    *

It seems I'll be left high and screwed if my account is hacked - is that the case?

2.
"I understand that Robinhood Financial does not currently support sending traditional market buy orders and that Robinhood Financial collars all market buy orders by using limit orders priced up to 5% above the last trade price. This is not the case for market sell orders. I further understand that when I send a market buy order through Robinhood Financial’s trading system, the trading system generates a limit order up to 5% above the last trade price, and then Robinhood Financial sends the order to an executing broker."

How does this aspect make an algorithm useful?

2 responses
Addison Dubay
Aug 17, 2017

You're reading into # 2 too much. If you are trading highly liquid securities, your order should still fill like a market order. For number 1, yes, Quantopian is not liable for any losses due to system issues, glitches, or hacks. Personally, having been running a live algorithm since March of this year (2017), you will experience most of your failures on Robinhood's end. (which is still not a lot overall)

Viridian Hawk
Aug 17, 2017

2 is to prevent you from placing orders for more cash than you have free in your account, because of how Robinhood handles margin (or doesn't). With Robinhood you cannot place any order unless you have enough "buying power" in your account to pay for it once it is filled. It's something you'll have to keep in mind when designing your algorithms for Robinhood. The "leverage" variable in Quantopian reports the ratio of the value of your filled positions to portfolio value, but if you have unfilled or partially filled orders, this figure will not accurately reflect how much buying power actually you currently have. It will be less.

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