- GME share price rises 60% on Friday as Robinhood lifts certain restrictions.
- SEC comments on recent stock market activity.
- Related stocks AMC, BBBY and BB all rise on Friday.
Update: Shares in Gamestop (GME) resumed their recent surge on Friday, bouncing back from heavy losses seen on Thursday. GME shares were up 60% at $314 at the time of writing. Gamestop had fallen on Thursday as numerous brokers put trading restrictions in place on new purchases of GME. But Robinhood said late on Thursday that it would allow “limited buys of these securities”.
The SEC commented on the recent stock market activity, with Reuters reporting SEC Says 'Market Participants Should Be Careful To Avoid' Illegal 'Manipulative Trading Activity' and that the SEC will 'Closely Review Actions Taken By Regulated Entities That May Disadvantage Investors' Or 'Inhibit Their Ability To Trade Certain Securities'.
Update: Gamestop (GME) shares collapsed on Thursday as brokers put restrictions in place on options trading, taking new positions and hiked margin levels. While some measures were to "help" retail investors, particularly increased margin, stopping new position taking appears to have done exactly what the brokers said they were trying to avoid. That is retail traders losing heavily. By taking the buy orders out of the market the Gamestop (GME) share price obviously collapsed, closing Thursday's session at $193.60 from a high of over $500!
Politicians and celebrities entered the debate. Ted Cruz, Alexandria Ocasio-Cortez and Elon Musk all tweeted demanding to know why trading was restricted.
The pressure appeared to tell on Robinhood. Vlad Tenev co-founder and CEO appeared on CNBC last night and said Robinhood plans to allow “limited buys of these securities”. “We’re doing what we can to allow trading in certain securities tomorrow morning,” the CEO also said on the CNBC show.
Robinhood released a statement on Thursday saying “As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.”
Gamestop (GME) shares are currently trading at $416 during Friday’s pre-market session, a rise of over 100%.
See more: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial
Gamestop (GME) shares continued moving higher in early trading on Thursday, with GME having broken through $500 in early pre-market trading.
See also Gamestop (GME) Stock Price and Forecast: Are shares going to break $500 today?
Multiple brokers put restrictions on trading in Gamestop (GME) and related shares on Thursday as the furore over the wallstreetbets phenomenon continued.
Robinhood reportedly put up the following “we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.”
Interactive brokers meanwhile tweeted:
Gamestop (GME) appeared to suffer on the back of these restrictions, with GME shares falling sharply from above $500 to below $300 before the market opened. However normal service was resumed once the regular session began and currently GME is back above $400, having been halted to the upside numerous times.
Wallstreetbets forum on Reddit continues to discuss GME and to add members now accounting over 4 million members and many other readers.
See also: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial
Short interest still high
S3 partners pointed out that the short interest in Gamestop remains stubbornly high and still above 100%. The initial reasoning behind the move, the short squeeze, remains in place.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.