The GameStop Corp logo on a laptop and the Robinhood application on a smartphone.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Robinhood will continue to restrict trading on Monday in short print names such as GameStop which have experienced explosive rallies and unprecedented volatility over the past week.
Customers can buy only one share in GameStop’s stock and five option contracts. However, the millennial stock trading program has reduced its list of restricted stocks from as many as 50 on Friday to eight days from Monday.
“The table below shows the maximum number of shares and option contracts you can increase your positions on,” Robinbood said in an updated Help Center message Sunday. “These limits can be changed throughout the day.”
The eight names are GameStop, AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group. Robinhood also restricts the purchase of option contracts in those securities.
If traders already own more shares or contracts than the limits above, their positions will not be sold or closed, but they will not be able to open new positions, Robinhood said.
The move to expand restrictions came after Robinhood revealed that the central Wall Street sale price last week required a tenfold increase in deposit requirements to ensure orderly settlements. Clearinghouses seek to protect investors and the markets by ensuring that brokers have the necessary funds to complete trades, which take two days.
The firm also increased margin requirements, or the amount of money in a customer’s account when they use leverage to buy a security.
The popular trading platform utilized credit lines and raised $ 1 billion in new funds from investors to meet the requirements of the clearing house.
A speculative buyout swept Wall Street last week as a new wave of home traders continues to use social media, in this case Reddit’s WallStreetBets forum, to coordinate big short press. Shares in GameStop, a struggling retailer of video games, soared 400% in the past week, ending January with a rise of 1,625%. AMC rose 277% last week, while Koss tore more than 1,800% higher.
Many on Wall Street have become increasingly concerned that this retail mania will cause more pain for brokers like Robinhood, and the short press will force large hedge funds to sell other positions to raise cash, creating unrest in the broader market.
Stock contracts fell in early trading on Sunday.
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