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Robinhood had earlier put buy limitations on approximately 13 equities including GameStop, Koss, Express, Nokia, Blackberry and others.
After limiting buy orders from retail traders at the tail end of last week, stock trading platform Robinhood has removed buy limitations put on highly volatile stocks including GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC). The company issued an update on its website late on Thursday, saying:
“There are currently no temporary limits to increasing your positions.”
As a result, retail traders interested in the prior volatile stocks can access them on the Robinhood app without limit. Speaking during a clubhouse chat with Elon Musk, Tesla Inc (NASDAQ: TSLA) CEO, Vlad Tenev, co-founder and co-CEO of Robinhood noted that the company had no choice and was only following orders from the National Securities Clearing Corp.
“It was not because we wanted to stop people from buying these stocks,” Robinhood wrote. “We did this because the required amount we had to deposit with the clearinghouse was so large – with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements – that we had to take steps to limit buying.”
Robinhood and Introduced Limitations
Robinhood had put buy limitations on approximately 13 equities including GameStop, Koss Corporation (NASDAQ: KOSS), Express Inc (NYSE: EXPR), Nokia Oyj (NYSE: NOK), and Blackberry Ltd (NYSE: BB). The firm had restricted retail traders to sell orders only with a limited buy of 500 GameStop shares and 5,500 AMC shares.
Robinhood was met with a huge uproar over its decision that entirely only bailed out hedge fund managers and left retail traders out of the market. The said stocks’ volatility had largely been fueled by Redditor WallStreetBets who was later banned on some social media platforms.
Having temporarily halted the trading of some stocks, the volume subsided over the weekend resulting in a huge dip. GameStop stock has dropped from trading at an all-time high of around $483 to yesterday’s close of $53.50. On the other hand, AMC stocks have dropped significantly from an all-time high of around $20.36 to yesterday’s close of $7.09.
However, GameStop stocks have rallied over 1192%, 367%, and 195% in the past year, three months, and one month respectively according to MarketWatch. Notably, a survey done by MarketWatch indicates GameStop stocks received an average of Under rating from 8 different analysts.
During the Clubhouse chat, Musk asked Tenev if there was something shady that happened with the decision-making process. In his defense, Tenev said:
“I wouldn’t impute shadiness to it or anything like that. The NSCC was reasonably subsequent to this.”
The trading app had previously received a huge number of negative ratings in the Google Play store, resulting in its rating falling from 4.2-star to a 1-star rating. However, Google scrapped off the negative reviews on grounds that they were against its terms and conditions for rating an application.