Robinhood Traders Discovered a Glitch That Gave Them ‘Infinite Leverage’
The fact that the app doesn't prevent you from doing this doesn't make it ok to do. It's pretty likely that borrowing and trading on the basis of nonexistent collateral is securities fraud.<p>I'm not an expert eg I haven't even done series 7 but I did the comparable securities certification in the UK some time ago and exploiting this "glitch" to trade using leverage without real underlying collateral would almost certainly be considered fraud in the UK irrespective of whether the app allowed it.  In the UK regulatory regime Robin Hood would likely also be liable for different reasons.<p>Dealbreaker (fwiw) seems to agree with me - its strapline for this story is "Press X, Y, Down, Down, Left, Y, X for what has to be securities fraud."<p><a href="https://dealbreaker.com/2019/11/robinhood-has-a-securities-fraud-glitch" rel="nofollow">https://dealbreaker.com/2019/11/robinhood-has-a-securities-f...</a>