Robinhood blocks purchases of GameStop, AMC, and others after days of Reddit-fueled rallies
- Robinhood on Thursday restricted trading of GameStop, AMC, BlackBerry, and other stocks.
- The brokerage told clients they could close positions in the stocks but couldn't buy more shares.
- Traders organizing on Reddit have furiously pushed the companies' stock prices higher.
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Robinhood has restricted trading of highly volatile stocks including GameStop and AMC on its platform, leaving its users unable to buy the highly volatile stocks.
The discount brokerage informed clients they could close out positions in the affected stocks but could not purchase additional shares. Companies affected by the restrictions are GameStop, AMC, BlackBerry, Bed Bath & Beyond, Express, Koss, Naked Brand, and Nokia.
Robinhood also lifted margin requirements for certain trades. The move came Thursday before markets opened.
"We continuously monitor the markets and make changes where necessary," the company said in a press release.
The stocks that were removed have all surged in recent sessions as day traders united in Reddit forums like r/wallstreetbets and frenetically bought the names to push their share prices higher. The phenomenon has already fueled massive losses for numerous hedge funds and caught the attention of regulators and the White House.
Robinhood's move followed similar freezes imposed by Charles Schwab and TD Ameritrade on Wednesday. Extraordinary trading volumes also prompted service disruptions across several brokerages as investors rushed to the heavily shorted stocks.