Greatest Companies — Episode 10

Visa doesn't lend money. It doesn't issue cards. It owns something better: the road that a huge share of the world's money has to travel, and it takes a tiny fraction of almost every journey. That position is one of the most powerful network advantages ever built.

This is the story of how a near-disastrous bank card experiment became a toll bridge over the global economy, and why competitors find it almost impossible to dislodge.

The Greatest Companies series studies the businesses that built the modern world, as proof of a simple idea: every legendary company begins with an idea that looks improbable, survives a stretch where failure looks inevitable, and reaches a point where success looks obvious. The opportunity lives in the space between the second and third.

Not investment advice; for educational and historical purposes only.

At approximately five in the morning on January 28, 2021, Robinhood received a margin call from the DTCC for three billion dollars. The clearinghouse required collateral the broker did not have. Hours later, Robinhood restricted trading in GameStop and a handful of other names. The reason was not a conspiracy. The reason was the plumbing.

This is Episode 10 of Inside the Machine: How Markets Really Work. The final core episode before the Bonus finale.

In this episode:

• How clearinghouses actually work and why they exist
• The Depository Trust and Clearing Corporation — $2.15 quadrillion processed annually
• The T+2 settlement cycle and what happens between trade and settlement
• The GameStop margin call and the 5am phone call that froze the market
• The move to T+1 and what it means for retail traders

Timestamps:0:00 Cold Open — The $3 Billion Call2:00 What a Clearinghouse Actually Does5:30 The DTCC and the Scale of Settlement9:00 T+2 and What Happens Between Trade and Settle12:00 The GameStop Moment in Detail14:30 What This Means for Your Trading

Read the full article and free Mind · Method · Money trading framework:https://completetradersedge.com/how-stock-settlement-works-clearinghouse/

Born in Budapest in 1906, he spent the better part of a century speculating across the great exchanges of Europe and America. He made and lost fortunes, survived two world wars, and turned his experience into bestselling books and decades of newspaper columns. His aphorisms about patience, psychology, and the crowd are still quoted across Europe today. This is the story of André Kostolany, the speculator who became a sage.