Robinhood has detailed its latest step in the complex quagmire of market manipulation that is this week’s GameStop hedge fund Reddit army debacle. Users will for the present be limited to holding a single share of GameStop and dozens of other stocks.
Several stocks were limited to five shares, and options contracts are likewise limited on many of the most-traded stocks this week, such as AMC and Blackberry. Positions exceeding these amounts will not be automatically sold, but they will apply if the user goes under them and tries to buy again. Fractional shares are also prohibited.
Any other specifics about positions, expiring options contracts and so on can be found in the announcement and related FAQs.
Robinhood has said that it has halted and now limited trading because of “financial requirements, including SEC net capital obligations and clearinghouse deposits” — essentially, the volume and value of the trading going on was beyond its ability to legally or realistically cover. Trading of certain stocks was halted or restricted earlier this week, but the new post details exactly which stocks are affected and how.
Robinhood restricts trading in GameStop after retail brouhaha shakes markets
The company had to hastily raise funds totaling over a billion dollars from its existing investors after reportedly maxing out half a billion in credit lines.
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With widespread outrage at the handling of the situation and the U.S. government taking notice, it’s unlikely Robinhood’s troubles (not to mention other trading apps and platforms) are anywhere near over. With new developments appearing seemingly every few hours, it’s hard to know how this particular story will develop.
AOC, Ted Cruz slam Robinhood for freezing some trades amid GameStop volatility
