Robinhood halts trades on certain stocks Thursday morning. The stock market is a crazy place right now, and things are getting crazier and crazier hour by hour. Robinhood, the popular brokerage app that picked up tons of new traders during the pandemic, has halted trading on certain stocks.
Jashaun wrote about how Reddit, the popular social media platform changed the market and price points on stocks like GameStop.
To sum up what is happening quickly (not from an expert), huge hedge funds shorted stocks like GameStop and AMC, meaning the mega firms are banking on those stock prices to collapse. Well, that did not happen in the slightest. Someone on Reddit found this public information, posted it on r/wallstreetbets and the common folk bought it all up. When you short a stock, the losses are unlimited, so these hedge fund suits are losing millions and millions by the second.
Robinhood tweeted Thursday morning that they are stopping their customers from buying GameStop and AMC ($GME & $AMC). The app decided to only allow their customers to sell their current positions.
“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.”
Robinhood statement 1/28/21
I mean come on, the company that was built on the ability for common folks to dip their toe in the stock market and to “democratize finance for all” is quite literally doing the opposite of that. They are protecting their investors, AKA the hedge funds that are getting smoked.
TL//DR: Robinhood halts trades on some stocks. The Brokerage app is screwing its customers over today by stopping purchases on cherry picked stocks to protect their investors. Younger investors are “Holding the line” as a middle finger to their brokerage app who are trying to hold them down. What the hell is going to happen next?
