The market can be quite bumpy at times (what the pros call “volatile”). Due to that volatility, regulators place capital requirements that affect the broker-dealer we work with to place and execute your trades.
In order to maintain these capital requirements, our broker-dealer, DriveWealth, may have to temporarily remove the ability to purchase certain stocks. We understand this can be frustrating, and we will continue to work closely with our partners during this time.
What are capital requirements?
Banks and other depository institutions are required to have a certain amount of liquid capital, which can easily convert to cash, to handle unexpected losses while still protecting customers’ withdrawal requests.
The amount required is set by regulators and primarily determined using a calculation between risks and assets. If the volatility (and risk) of certain stocks drastically increases, broker-dealers can choose to temporarily remove the ability to purchase stocks to ensure they maintain the necessary capital requirements.