The Robinhood trading app has a bug that’s allowing users to trade with an infinite amount of borrowed cash, creating what one user called an “infinite money cheat code.”
The bug was first discovered by the WallStreetBets sub-reddit on Monday after one user exploited the glitch to turn a $4,000 deposit into a $1 million position.
The company “is aware of the isolated situations and communicating directly with customers,” according to a spokesperson.
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Robinhood Markets’ app has a bug that allowed users to trade with an unlimited amount of borrowed cash, creating what one user called an “infinite money cheat code.”
The bug was first uncovered by members of the WallStreetBets sub-reddit. A Monday post showed user MoonYachts exploiting the glitch to turn a $4,000 stake into a $1 million position. He laid out how he pulled off the trades through the “free money cheat,” and told other users “DON’T DO THIS.”
Here’s how the typically-unauthorized trade works:
Users who pay a premium for Robinhood Gold sell call options with money borrowed in the app.
Robinhood incorrectly adds the value of the options sold to the user’s cash pile.
This gives the user more capital to trade with, …read more
Source:: Businessinsider – Finance