Several stockbrokers, including Robinhood, have announced the suspension of trading for several stocks following unprecedented volume and irregular pricing.
Popular stockbroker Robinhood has stated on its platform that the buying of several stocks, including GameStop (GME), Nokia (NOK), and AMC Entertainment (AMC), among others, will not be tradable due to market volatility.
Robinhood goes on to explain that “we are restricting transactions for certain securities to position closing only.”
Robinhood Robs the Hood
Several other stockbrokers have taken similar stances to halt trading. The move has received backlash from the Wall Street Bets and cryptocurrency community.
The unprecedented move received negative applause from several key members of the cryptocurrency fraternity. Gemini co-founders Cameron and Tyler Winkelvoss also had something to say.
Monero founder Riccardo Spagni also commented on the news. Spagni stated that:
“retail is destroying the underlying assumptions made by institutional investors, so now the trade platforms are trying to prevent retail from trading.”
The news has seen traders across the stock and cryptocurrency markets call foul play. The decision to halt trading is not something a broker does on a whim.
This week has been a remarkable week for the stock market. Small stocks have seen dramatic price increases. None so much as the American video game, consumer electronics, and gaming merchandise retailer GameStop (GME).
GameStop’s share price has risen by 2,000% since the beginning of January. All thanks to a previously little-known Reddit group called Wall Street Bets. The group of forum members has caused a surge in GME, squeezing short-sellers of the stock.
In doing so, they inflicted losses on investment management firms. One particular firm, Melvin Capital, took huge losses on the stock. Pundits believe Melvin had the biggest short position on GME.
Melvin Capital exited its short position earlier this week. But that hasn’t stopped the momentous climb. GME reached over $400 before the suspended trading announcement.
No Paused Trading On Binance
The move reiterates the importance of decentralization within the markets. Binance CEO Changpeng Zhao reiterated that Binance “won’t be able to ban it or pause trading” following a similar surge in dogecoin price action.
The meme digital asset is available on Robinhood. Perhaps this is one of the reasons the memecoin has become so popular.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.