Robinhood Will Continue to Restrict GameStop Trades on Monday
Robinhood users will only be authorized to purchase one share of GameStop and five options contracts. The trading platform had restricted trading on as many as 50 stocks last week but condensed the list to eight starting Monday. Many of these stocks were heavily shorted and have experienced massive surges and volatility over the past couple of weeks.
Robinhood will be restricting trading of the following:
- AMC Entertainment
- Genius Brand International
- Naked Brands Group
Robinhood was forced to enact restrictions after the central Wall Street clearinghouse, an intermediary between traders and brokers, mandated a ten-fold increase in Robinhood's deposit requirements last week to ensure that settlements would be completed.
Robinhood also raised its margin requirements. The trading platform raised $1 billion in new funds from investors to the clearinghouse requirements last week,
The popular trading platform tapped credit lines and raised $1 billion new funds from investors to meet the clearinghouse requirements last week.
Many are worried about the activity around the restricted stocks. Retail investors have forced billions of dollars from the hands of hedge funds that could create more turmoil for the market overall.