Robinhood Tightens Trading Limits on GameStop and 50 Other Stocks
Robinhood drastically tightens trading restrictions, limiting users to purchasing just one share of GameStop while expanding its restricted list to 50 tickers.
Robinhood severely tightens trading restrictions throughout the day, only allowing clients to buy a single share of GameStop. The stock trading app expands its list of restricted stocks from 13 earlier in the day to 50, explicitly telling clients the maximum number of shares and options contracts they can add to their positions.
These tight limitations take the wind out of point-and-click traders who are trying to jack up the price of heavily shorted stocks. While customers without existing positions can only buy one share of GameStop and five options contracts, those who already own shares are completely blocked from buying any more, though Robinhood does not force the sale of existing holdings that exceed the new limit.
The restricted list also includes major names like AMC Entertainment, American Airlines, Bed Bath & Beyond, Advanced Micro Devices, Starbucks, and Beyond Meat, with a hard cap of five shares for any stock on the list. Robinhood states that these restrictions act as necessary risk management decisions to protect the firm and its clearinghouses, even as the moves spark massive outrage among users.