The logo of the trading app Robinhood is displayed on a smartphone.
Olivier Douliery | AFP via Getty Images
Robinhood began easing trading restrictions on Monday, raising its trading limit on GameStop to four shares of a single stock.
Untying the restrictions comes amid another cash injection for the pioneer of free stock trading.
Robinhood’s changes are minor. Customers who already own more than four shares of GameStop will not be able to purchase any new shares.
The brokerage also increased the limits for AMC Entertainment, Express, Koss and some of the other eight restricted shares. Here are the new restrictions.
Robinhood restricts trading on certain stocks
Source: Robinhood
Amid an increase in the capital requirements of the SEC and the Depository Trust & Clearing Corporation, Robinhood last week imposed restrictions on certain stocks and options amid a small investment frenzy in strongly abbreviated names. Reddit-obsessed retailers have boosted GameStop’s share by more than 400% in an effort to reduce the hedge fund’s name.
While the share of GameStop rose, however, regulators increased the amount that Robinhood would have to deposit with its clearing houses if the trade were to cause huge losses. JMP Securities’ estimated needs are met by a staggering $ 7.5 billion to $ 33.5 billion.
The restricted list tells clients how many shares and option contracts they can buy with respect to a particular security, and Robinhood seems to bring back some of its limitations. Now Robinhood customers can buy four shares of GameStop, instead of just one.
GameStop shares last fell 17% after losing more than a third of their value.
Customers can buy 75 shares of AMC, higher than the previous limit of only ten shares. Robinhood customers can now buy 200 shares of Express, instead of the previous cap of 20 shares. However, if a customer owns more than 200 shares of Express, they can no longer buy shares of the retailer in question.
Trade limits for Nokia and BlackBerry have remained the same.
The change in policy in Robinhood comes amid news that the pioneer of free stock trading has raised another $ 2.4 billion from investors to support its record growth in customers, the company said in a blog post on Monday. This contributes to the $ 1 billion raised last week to sharpen Robinhood’s balance sheet in anticipation of the turbulent speculative trade. The company has also utilized credit lines for more funds.
The new round of financing was led by Ribbit Capital, as well as existing investors ICONIQ, Andreessen Horowitz, Sequoia, Index Ventures and NEA, Robinhood said.