Robinhood Blocks Users Trading GameStop Stocks And Other Reddit Picks
Trading platform Robinhood has restricted its users from buying or trading any of the popular Reddit stocks, including GameStop, AMC and Blackberry.
While users can still close out existing positions, they can no longer make any additional purchases due to ‘recent volatility’ in the market.
‘We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities,’ the company said in its statement.
As per The Verge, Robinhood isn’t the only company to block trading on GameStop. Traditional brokerages like Charles Schwab and TD Ameritrade have also imposed restrictions.
The news comes after it emerged that GameStop stock was the most traded in the US yesterday.
The rise of GameStop has taken Wall Street by storm in recent days, after a group of tech-savvy Reddit users joined forces to increase the video game retailer’s share price tenfold in a matter of weeks.
Users noticed that Melvin Capital had betted against GameStop by short-selling its shares, meaning it stood to gain if GameStop value went down and lose if it went up.
Determined to flip the script, Reddit members quickly started to pile into Gamestop so Melvin Capital would be hit by the huge losses.
The latest development is already being met with backlash from members of the WallStreetBets subreddit, the users of which initiated the GameStop short squeeze.
‘Individual investors are being stripped of their ability to trade on @RobinhoodApp,’ the group’s moderator wrote on Twitter today.
‘Meanwhile, hedge funds and institutional investors can continue to trade as normal. What do you call a market that removes retail investors ability to buy to save institutional investors shorts?’ the tweet said.
Yesterday, Discord also banned the group from its platform, but it denied that the suspension had anything to do with the recent stock market activity.
The platform said it had banned the group because it continued to propagate ‘hateful and discriminatory content after repeated warnings’.
WallStreetBets, which dubs itself a ‘platform for the people to speak truth to power in the financial world’, said on Twitter that it is ‘tired of being run over by the big guys’ of Wall Street.
Earlier today, the group’s moderator welcomed comments by television host Charles Payne. He said, ‘The shorts have had their way with the market for decades, and no one has ever complained about it, so I am thrilled, that individual investors are playing the same game, and now you (big hedge funds) are losing.’
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