Robinhood, Interactive Brokers restrict trading in GameStop, BlackBerry, and other stocks

Online trading platforms Robinhood.com and Interactive Brokers announced Thursday that they had restricted trading in shares of GameStop, BlackBerry and other companies that posted hefty gains this week on a social media-fueled trading frenzy.

Individual investors who trade on online brokerage apps like Robinhood and discuss stocks on anonymous social media messaging boards have seen a dramatic surge in the share price of companies like GameStop, BlackBerry, and AMC Corp. triggered.

The oversized gains have forced some hedge funds that had bet against the stocks to fold their positions and have led commentators to call for regulatory scrutiny.

READ MORE: GameStop, BlackBerry and AMC stocks see trading disruptions as social media hype drives volatility

The battle between small traders and hedge funds rocked the US and European stock markets and moved to Asia on Thursday. Several Australian companies have joined a list of social media hyped moves that have cost financial institutions billions of dollars.

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The sharply shortened Australian stocks, including Webjet and Tassal Group, rose more than five percent, despite the ASX 200 benchmark index falling two percent in Sydney.

Reddit discussion threads were buzzing again with gossip on Thursday as members of the merchant-focused group WallStreetBets raced over four million.

In a discussion, thousands of participants responded with « We love this stock » to a post that called for more purchases from GameStop and occupied retailers than Iron Man versus a hedge fund Thanos, alluding to the superhero movie Avengers: Endgame.

The war started last week when Citron Capital’s famous short seller Andrew Left bet against GameStop and found a flurry of retailers betting the other way.

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He said on Wednesday that he had given up the bet.

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Regarded as “stupid money” by market professionals, the group of traders – some of them former bankers who work for themselves – has grown into an increasingly powerful force over the past year, worth 20 percent of stock orders, according to data from the Swiss bank UBS showed.

The only way to take advantage of the stock markets over the past decade, fueled by the steady flow of newly created money from major central banks, has also made it less risky to bet on rising stocks.

READ MORE: How COVID-19 is attracting Canadians to the stock market

The US Federal Reserve firmly opened these taps at its last meeting on Wednesday.

This week’s turmoil caught the White House’s attention as President Joe Biden’s economic team, including Treasury Secretary Janet Yellen on her first full day on Wednesday, « monitored the situation. »

William Galvin, the regulator of the US state of Massachusetts, has asked the NYSE to suspend trading in GameStop for 30 days to allow a cooling off period.

« The prospect of intervention here is clearly high, but this will only get the (WallStreetBets) community on their toes as it will only create a feeling of inequality in the financial markets, » said Chris Weston, chief research officer at broker Pepperstone in Melbourne.

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« It’s okay to have Fed action backing zombie companies. However, if retailers follow a path that skews asset prices by targeting short sellers, that will stop. »

Reddit said Wednesday that it had not been contacted by authorities about the surges.

– With files from Global News’ money reporter Erica Alini

Can Robinhood Restrict Trade?

Can Robinhood Restrict Trade?

Robinhood also said it would allow limited purchases of the at least 13 stocks it restricted as of Friday. The company said its original decision to restrict trading in stocks was based on its capital commitments and clearinghouse deposits, which fluctuate due to volatility in the markets.

Why did Robinhood stop trading?

On Thursday morning, Robinhood banned users from trading GameStop stock (and a handful of other companies), citing « significant market volatility » in the process. This decision caused a massive outcry on social media. … « Just letting people sell is the definition of market manipulation. » A post on Wall Street Bets said.

Why did Robinhood stop trading with GameStop?

GameStop, the video game retailer, was at the center of the frenzy, which also included AMC Entertainment Holdings, the cinema chain. Robinhood said Thursday afternoon that some trading could resume on Friday and that the stop was a « risk management decision » based on financial requirements.

What stocks has Robinhood restricted?

What stocks has Robinhood restricted?

The securities on which trading is restricted are Gamestop, AMC Entertainment, Bed Bath & amp; In addition, Blackberry, Nokia, Express Inc., Koss Corp., American Airlines, Tootsie Roll, Trivago and Naked Brand Group.

Can you sell GME on Robinhood?

Robinhood has restricted the trading of highly volatile stocks, including GameStop and AMC, on its platform so that its users cannot buy the highly volatile stocks. The discount brokerage advised clients that they could close positions in the affected stocks but would not be able to buy additional stocks.

How Long Can Robinhood Restrict Trading?

How Long Can Robinhood Restrict Trading?

If you do not cover your day trade call within the 5 day window, you will not be able to trade the day trade for 90 days.

Can you trade without 25k?

If you do not have $ 25,000 in your brokerage account prior to day trading activities, you will not be allowed to make day trading activities. The money must be in your account before you start day trading and you must have a minimum balance of $ 25,000 in your brokerage account at all times during day trading.

Can I trade with 25k on Robinhood?

As long as you have a $ 25,000 cash account, you can trade during the day. With a Robinhood Cash account, you can place commission-free trades both during regular and after-hours. You don’t have access to instant deposits or instant billing.

What’s the catch with Robinhood?

The U.S. Securities and Exchange Commission on Thursday accused the fast-growing online broker Robinhood Financial of misleading customers about how it made money for several years, causing deals to go so badly that customers are also considering the company’s free commissions fared worse.

What if a stock is unsupported by Robinhood?

Stocks may not be searchable or may be marked as non-tradable for several reasons: The exchange has suspended trading. The stock has been delisted from major exchanges and stores in the OTC market.

Do I lose my money if a share is delisted?

« While some investors may be willing to buy the company’s stock, they will only do so at significantly lower prices, » says the SEC. … If a company is delisted from a stock exchange, the shares will continue to trade over the counter and ownership of the shares will not be affected.

Can you buy more stocks on Robinhood?

Users can still close existing positions, but they can no longer buy stocks. … Robinhood – a popular exchange application that allows amateur day traders to buy these stocks with no fees – was a key tool in the Reddit group’s ability to drive prices higher.

What if I own a share that is being delisted?

As a shareholder, not much changes if a stock you own is delisted from a major exchange. However, depending on your broker, your ability to actively trade stocks in that company may be limited. You should be able to sell at least the stocks that you owned before the stock was delisted.

Robinhood, Interactive Brokers restrict trading in GameStop, BlackBerry, and other stocks
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