Beginning today, Robinhood will continue limiting the number of shares of Gamestop that investors can buy. Gamestop shares are still in the midst of a short squeeze, with several key hedge funds who had shorted Gamestop now experiencing heavy losses.
Additional Stocks in Focus
The Reddit “army” of online traders targeting Gamestop are already moving on to silver, as well as AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group. Robinhood says it is limiting the buying of of those stocks.
Robinhood’s efforts are designed increase and extend trading restrictions after the central Wall Street clearinghouse instituted a massive (10x) increase in Robinhood’s deposit requirements last week. The cleaning house needs to ensure Robinhood has enough money to settle these trades.
In actuality, final trades typically don’t settle for a couple days…as such, the cleaning house needs to be certain its brokerage houses can pay its bills. This is why Robinhood was forced to raise its margin requirements — because Robinhood needed to ensure its own clients were solvent when they were using leverage to by a stock.
In an effort to inject more liquidity and have deeper pockets to support the trades, Robinhood raised a $1 billion new fund from investors which enabled the firm to stay afloat and meeting the clearinghouse requirements last week.
Meanwhile, many of the traders on Wall Street Bets have already moved on…to silver. Watch silver prices this week…they’re already up 15% since last Wednesday and trading at their highest level since Mid-August amid another attempt to orchestrate a short squeeze on Wall Street Bets.