Paramount Pictures
- Traders have been exploiting a glitch in Robinhood’s app to trade with a limitless supply of borrowed cash, and one member of an online forum compiled a hall-of-fame list of the largest positions created through the bug.
- A member of the r/WallStreetBets subreddit discovered the glitch in late October. Several other users copied the trade, boasting about increasingly large sums of borrowed cash.
- Here are the five hall-of-fame members, from the user who first traded with the bug to one member who said they turned a $3,000 deposit into a $1.7 million position.
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Traders have been using a glitch in Robinhood’s app to trade with an unlimited supply of borrowed cash – and one member of an online forum compiled a hall-of-fame list of the largest positions created through the bug.
A member of the r/WallStreetBets subreddit discovered the glitch in late October after using a $2,000 deposit to trade with $50,000 in buying power. Other forum members glorified the trade before executing similar trades. In a matter of days, users were one-upping one another to see who could amass the most borrowed cash.
The trade involves Robinhood Gold users selling call options with money borrowed through the platform, also known as “leverage.” The app incorrectly added the value of the options sold to traders’ cash pile, giving them more buying power with which to repeat the trade.
One r/WallStreetBets user described the trick as an “infinite money cheat code,” though it’s uncertain what action, if any, will be taken against the traders for their high-risk activity.
One forum member who goes by SocioButt posted a list highlighting members who gambled the most through the exploit. Here are the five hall-of-famers, from the user who first found the glitch to one who said they turned a $3,000 deposit into a $1.7 million position.
ControlTheNarrative
ControlTheNarrative
Deposit: $2,000
Leverage: $48,000
Gain/loss: N/A
Post time: 11:04 a.m. ET, October 31
Top comment: “Everyone should be forced to watch this video as soon as they join” the subreddit.
Woodc93
www.jamesplett.com
Deposit: $15,000
Leverage: $1,300,000
Gain/loss: -$180,000
Post time: 1:17 p.m., November 4
Top comment: “Update: account just got deactivated bc I tried to leverage more to buy more AMD puts.”
MoonYachts
Paramount Pictures
Deposit: $4,000
Leverage: $1,279,550
Gain/loss: -$22,022.71
Post time: 6:31 p.m., November 4
Top comment: “The cash balance from the covered call gets added to your cash – increasing your buying power by the premium you took in. ***Also, DONT DO THIS****”
Tomatotowers
Lionsgate via YouTube
Deposit: $5,000
Leverage: $314,070
Gain/loss: N/A
Post time: 9:40 p.m., November 4
Top comment: “How much leverage was too much? 💯 x?”
Call_Warrior
AMC screencap
Deposit: $3,000
Leverage: $1,732,640
Gain/loss: N/A
Post time: 11:13 p.m., November 5
Top comment: “We are actually about to witness an SEC raid of WSB and bankruptcy of Robinhood.”