(Bloomberg) — Robinhood Markets and Interactive Brokers Group Inc. curbed trading in stocks including GameStop Corp. and AMC Entertainment Holdings Inc., prompting outrage from users who had pumped up the shares in a Reddit-inspired frenzy.
Robinhood, which attracted millions of new users last year as individual investors poured into the market during pandemic lockdowns, restricted transactions on those stocks and others, the brokerage said Thursday in a blog post. Interactive Brokers said it wouldn’t allow clients to take new options positions in names including AMC, GameStop and BlackBerry Ltd.
Traders were quick to express their frustrations over a platform that touted easy access and democratization of Wall Street. Robinhood user Justin Foley, 25, of Philadelphia, had put in orders for GameStop, Nokia Oyj and AMC Wednesday night.
“Now it’s just sitting in a queue,” Foley said. “I am scared of pulling out the orders and then Robinhood opening back up and then I miss the opportunity. I will be really upset. It’s supposed to be a free market, and Robinhood taking it into their own hands seems wrong.” He’s considering moving to Webull, a Chinese competitor.
The restrictions are the latest twist in a battle that has pitted enthusiastic amateurs against professional traders, resulting in billions of dollars of losses for hedge funds that were forced to close out their bets that shares of companies such as GameStop would fall.
Also read: GameStop’s Reddit Revolution Echoes Occupy Wall Street Crusade
The Reddit-fueled rally in GameStop, the video game retailer, has sent the stock to over $400 from less than $19 at the end of 2020. The shares traded up 19% at $414.46 at 10:14 a.m. in New York.
“Long stock positions will require 100% margin and short stock positions will require 300% margin until further notice,” Interactive Brokers said in a statement.
Read more: GameStop Briefly Tops $500 as Stock Resumes Momentous Surge
“We’re committed to helping our customers navigate this uncertainty,” Robinhood said in the blog post. Investors looking to move to other venues may not find it easy. Trading 212, another app, said it has temporarily stopped taking new clients.
On Wednesday, Charles Schwab Corp.’s TD Ameritrade also curtailed transactions on GameStop, AMC and other securities. Amid the heightened volatility, trading platforms including TD Ameritrade, Robinhood, Schwab and Fidelity all experienced technical problems.
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