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Here's why the decision was made earlier by our execution partner, DriveWealth, to restrict trading on $GME, $AMC and $NOK.
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When you buy or sell a stock, it takes two working days for the cash to be transferred from buyer to seller.
This is why you see ‘unsettled cash’ on your Freetrade app for two working days after you sell shares.
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This is why you see ‘unsettled cash’ on your Freetrade app for two working days after you sell shares.
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Sitting in between the two parties to the transaction is often an intermediary known as the clearing house.
Clearing houses facilitate transactions between buyers and sellers in the stock market.
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Clearing houses facilitate transactions between buyers and sellers in the stock market.
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In doing so, they have to take on counterparty risk - the risk that one party won’t deliver the money needed to complete the transaction.
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To reduce the likelihood of this happening, clearing houses will make broker-dealers such as DriveWealth and others put down a lump sum of cash.
The collateral, often referred to as ‘margin’, is there to make sure they pay.
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The collateral, often referred to as ‘margin’, is there to make sure they pay.
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Normally, this isn’t a problem
Due to the volatility in the stocks, Depository Trust Company (DTC) advised yesterday to clearing brokers that margin requirements for $GME $AMC $NOK will be raised, causing the collateral requirement imposed on DriveWealth to increase by 250%
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Due to the volatility in the stocks, Depository Trust Company (DTC) advised yesterday to clearing brokers that margin requirements for $GME $AMC $NOK will be raised, causing the collateral requirement imposed on DriveWealth to increase by 250%
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DriveWealth is looking into ways to get these stocks back online.
In the meantime, please accept our apologies for this inconvenience.
We will update you as soon as we hear from them.
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In the meantime, please accept our apologies for this inconvenience.
We will update you as soon as we hear from them.
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