IMO the "problem" is that RH doesn't tell you that (or at least their marketing makes it confusing at minimum). The way they describe it as an "instant bank transfer", not "we give you margin until your transfer clears". The former gives you the impression that its your money that you're trading with, while the reality is it's a margin account.
That's why a lot of people were angry. They were forced to sell GME because they were technically using margin and it got called, but they thought it was their own money from their own bank account. The optics are that RH forced them to sell GME when they didn't want to.
Well someone took their own life because they showed him a real data for the moment and it was in red and it was all over news. Either way they target amateur market.
If you do any trading at all, you want a margin account so you don't have to wait for settling before making another purchase. While technically the money is borrowed for the 2 days to make your trade, I would never considered it borrowed in the typical use of the word margin.
i agree, but given the number of new users onboarding to robinhood, it's very possible that they don't have enough liquidity to cover the borrowed money, even if it is slated to be 100% by cash in 2 days
