GameStop, AMC trading is now limited at TD Ameritrade, Schwab



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Some large brokerage houses have started to respond to a frenzied surge in the price of corporate shares which has been attributed to rabid buying by individual investors on social media platforms.

TD Ameritrade said on Wednesday it was restricting trading for GameStop
GME,
+ 103.50%
and AMC Entertainment Holdings
AMC,
+ 245.76%,
as well as other names, amid a three-digit percentage price surge for these companies in recent days.

“In the interest of mitigating the risk to our business and our clients, we have put in place several restrictions on certain transactions in $ GME, $ AMC and other securities,” a TD Ameritrade spokesperson told MarketWatch, referring to the stock symbols of the companies. .

“We made these decisions very cautiously against the backdrop of unprecedented market conditions and other factors,” she said.

Charles Schwab, who bought TD Ameritrade but still operates as an independent retail brokerage platform, said he has tightened margin requirements in some of these trade names, including GameStop.

A spokeswoman for Schwab said the platform changed its margin requirements, or how much an investor can borrow, on January 13 and said it put “restrictions in place on certain transactions on GME and ‘other titles’.

The restrictive measures come as shares of video game retailer GameStock soared 1,600% in January, as traders gathered in online chat rooms to take big bets on stocks using options, often out-of-the-money calls that only pay off if the stock’s value increases over a period of time.

Traders on sites like Reddit’s WallStreetBets and using trading platforms like Robinhood clashed with hedge fund investors, sparking a battle between Wall Street’s top short sellers and individual investors in GameStop stocks.

A spokesperson for Robinhood said officials of the popular trading platform “constantly monitor the markets and adjust as we see fit for the benefit of our clients.”

Robinhood said it had also moved the high requirements for GME and AMC to 100%, pointing out that Robinhood does not allow stock shorting or allow clients to trade naked options.

However, GameStop’s recent surge has spilled over into other areas of the market, with shares of companies like AMC Entertainment also surging on Wednesday, along with shares of Bed Bath & Beyond BBBY,
+ 25.63%
and retailer Express Inc. EXPR,
+ 206.91%.
whose shares increased by 250%.

Lily: It’s Not Just GameStop: Here Are Some Of The Other Heavily Shorted Stocks That Are Pulling Higher

The recent volatility in trade has even worried some on Wall Street, fearing a bubble. The Dow Jones Industrial Average DJIA,
-1.58%,
the S&P 500 SPX index,
-2.00%
and the Nasdaq Composite Index COMP,
-1.74%
were all down Wednesday.

Regulators have been aware of the recent action, with William Galvin, Secretary of the Commonwealth of Massachusetts, telling Barron’s in an exclusive statement on Tuesday that he was watching the action unfold.

“It’s definitely on my radar,” said Galvin. “I am concerned as it suggests that there is something systematically wrong with the options for trading on this stock.

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