The WallStreetBets forum on the Reddit Inc. website on a laptop and the GameStop logo on a smartphone held at Hastings-On-Hudson, New York, USA on Friday, January 29, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
GameStop shares were volatile in trading in front of the market on Monday as the frenetic trading driven by Reddit continues.
The shares of the brick-and-mortar video game retailer rose 18% to $ 384.89 in the pre-sale trading market. The stock last rose about 2% to $ 333. The stock rose 1,625% in January.
According to data from S3 Partners, the astronomical march inflicted a loss of market supply of almost $ 20 billion on hedge funds with short positions. However, many short sellers hold their clumsy positions.
Robinhood and other trading programs restrict the purchase of GameStop shares and option contracts, along with those of other strongly abbreviated names, after a week of extremely volatile trading due to a retail frenzy led by 5 million strong Reddit thread “WallStreetBets. “
There are also restrictions for AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group.
Short selling is a strategy in which investors borrow shares of a stock at a certain price based on the expectation that the market value will fall below the level when it is time to pay off the borrowed shares.
CNBC’s Yun Li contributed to this report.