That’s not very Robin Hood of you.
In the wake of a bunch of hedge funds getting dicked over by their own hubris, Robinhood, the stock trading app used by the likes of Wallstreetbets, has since limited the trading of the stocks for AMC and, of course, GameStop. And while they’re the focus here, they’re far from the only one.
Coincidentally, stocks in both companies have fallen in price. I won’t dare guess what it’s at now, nor where it’ll be when this article posts, but needless to say, things are volatile.
As a matter of fact, Robinhood issued a statement on the matter. It reads as follows:
Our mission at Robinhood is to democratize finance for all. We’re proud to have created a platform that has helped everyday people, from all backgrounds, shape their financial futures and invest for the long term.
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 $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. We also raised margin requirements for certain securities.
Amid significant market volatility, it’s important as ever that we help customers stay informed. That’s why we’re committed to providing people with educational resources. We recently revamped and expanded Robinhood Learn to help people take advantage of the hundreds of financial resources we offer and educate themselves, including how to make sense of a volatile market. In 2020, more than 3.2 million people read our articles through Robinhood Learn.
We’re committed to helping our customers navigate this uncertainty. We fundamentally believe that everyone should have access to financial markets. We’re humbled to have helped many people invest in the markets for the first time. And we’re determined to provide new and experienced investors with the tools and resources to help them invest responsibly for their long-term financial futures.
In another post, they stated that they’ll only allow limited buys on these securities on Open Friday. That post:
This past year, we’ve seen the financial markets become a voice for the voiceless. We’ve seen a new generation of people come into the markets, sparking conversations about what it means to be an investor. Our customers have shown the world that investing is for everyone—not just institutional investors and hedge funds.
Amid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.
We stand in support of our customers and the freedom of retail investors to shape their own financial future. Democratizing finance has been our guiding star since our earliest days. We will continue to build products that give more people—not fewer—access to our financial system. We’ll keep monitoring market conditions as we look to restore full trading for these securities. We will update this Help Center article with the latest changes.
We are deeply grateful to our customers.
As stated above, they’re not the only ones. Both TD Ameritrade and E-Trade have done much the same. Which has, in turn, prompted a class-action lawsuit filed in the southern district of New York.
Hell, I can’t believe it, but I agree with Michael Pachter on something for once.
Louis Rossmann, despite not being terribly involved in finance, has been covering the event himself, mostly from a technological standpoint. In the first video below, he mostly points out that most people don’t really know any better when someone says something about “hackers” in regards to an event like this. The latter, however, is fairly self-explanatory.
This whole thing’s a mess but if you have any GME, this is probably a good recommendation, even if it doesn’t make you a ton of money:
Source: Gamespot
About Author
