No time right now?
Gamestop, AMC or Nokia – anyone who wants to invest in these hotly contested stocks through broker apps like Robinhood or Trade Republic is currently out of luck. Trading is interrupted.
A battle is currently raging on the stock market. On the one hand, there are traders who rely on broker apps such as Robinhood or Trade Republic and, among other things, get stock recommendations from Reddit. On the other hand, there are hedge funds that are used to success. Some (hedge funds) bet on falling prices. The others (Robinhood traders) drive up the prices of stocks where those shortsellers are very active. The argument has rocked so high in the past few days that Robinhood and Trade Republic have now pulled the rip cord.
After a day full of technical inconsistencies and failures, now also #TradeRepublic start trading stocks that are likely to face a massive short squeeze. As a precaution, to protect the shareholders, as it is called.
Yeah 🤣 pic.twitter.com/Kz8qzhcMiZ
– André Vatter (@avatter) January 28, 2021
Having been there all day Trading problems via the Trade Republic app, the operators have now informed their customers that buy orders for certain stocks are no longer possible. The reason given is that “there is currently more purchases and extremely high volatility in stocks that are normally less liquid”. The shares of Gamestop, AMC, Blackberry, Express and Bed Bath & Beyond are “apparently currently the subject of violent coordinated price speculation”. In order to avert risks from the users, no new orders to buy these stocks would be accepted.
Robinhood stops buy orders for Gamestop and Co.
Robinhood responded similarly. The app, which was committed to democratizing the trading of stocks, has also stopped buying several stocks that are likely to be squeezed out. This increases the prices of stock market values on which a particularly large number of short positions sit. Since these bets on falling prices are often carried out via so-called short sales, ie the shortsellers “really” have to purchase the corresponding shares at the current market price after a certain period of time, they are threatened with losses. On the other hand, should the price fall, the corresponding shares could be bought at a lower price.
Robinhood established the stop of trading with significant market volatility. For the following values, only shares can currently be sold: American Airlines, AMC Entertainment, Blackberry, Bed Bath & Beyond, Castor Maritime, Express, Gamestop, Koss, Naked Brand, Nok Airlines, Sundial Growers, Tootsie Roll and Trivago. In addition, the margins are to be increased for certain areas. This step should also prevent potential buyers from making purchases.
Up and down with the Gamestop share
On the Nasdaq, trading in the stocks currently in focus, such as those of Gamestop and AMC Entertainment, was repeatedly suspended for a short time on Thursday morning. A look at the Gamestop share shows how strong the fluctuations are at the moment. It started trading on Thursday morning (New York time) at $ 263.49 and shot up to $ 469 within half an hour. It then went down to $ 132 in the next hour before moving back to the opening price of around $ 265 around noon.
Also interesting: Gamestop – US regulators take a closer look at Robinhood traders