Robinhood tightens screws on GameStop shares
Constraints on Robinhood traders got tighter throughout the day on Friday, only permitting customers to buy a single share of GameStop. The stock trading app also broadened its list of limited stocks from 13 earlier in the day to 50. "The table listed below shows the maximum number of options and shares contracts to which you can increase your positions," Robinhood composed. CNBC recreated the table. The restricted list informs customers the number of shares and options contracts they can buy referring to a specific security. Robinhood clients can just purchase one share and approximately five alternatives agreements of GameStop; however, if a consumer currently owns several share of GameStop, they are unable to buy anymore shares. Robinhood's constraints might take the wind out of point-and-click traders attempting to boost the price of GameStop. Robinhood, however, will not sell any customer's shares of GameStop that are currently over the one-share limit from a previous position. The stock, which closed up 67%, was off its highs of the session as the new more serious limitations were implemented. Previously in the day, clients could purchase 5 shares of GameStop. The most shares clients could purchase of any of the 50 stocks was five. Customers without existing shares can only purchase one share and 10 alternatives agreements in AMC Entertainment, which is down from an earlier 115 shares. Shares of AMC Entertainment closed up 53% but likewise well off their highs of the day. Clients can only purchase one share of American Airlines, Bed Bath & Beyond and Koss. The stock trading app has also expanded its list of limited stocks. A few of the new names include Advanced Micro Devices, Starbucks, Novavax, General Motors and Beyond Meat. On Thursday, Robinhood told clients it was just enabled to sell shares, not buy brand-new ones, in particular securities that were garnering social media attention from Reddit crowds. The company likewise raised margin requirements, or the amount of cash in a client's account when they will be utilizing take advantage of to buy a security. Robinhood's choice was met outrage, with lots of users taking their grievance to Twitter. Robinhood stated the trading limitations were danger management decisions to safeguard Robinhood and its clearinghouses, however touted that the constraints would be reduced on Friday. The totally free trading leader raised $1 billion in financier cash and tapped more credit lines overnight for its clients to be able to brand name like GameStop and AMC Entertainment on Friday. The limitations got tighter throughout the trading day, as the list of minimal securities grew and the number of shares customers could purchase shrunk for specific stocks.