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Maximum online brokers have ceased handling any further orders for GameStop stock, suggesting investors couldn’t lock out their positions to make their profit. Recently, Robinhood has declared the termination of trading for several stocks after unprecedented volume and different pricing. Robinhood has stated on its platform that the exchange of several stocks, including Nokia (NOK), GameStop (GME), and AMC Entertainment (AMC), among others, will not be tradable due to market volatility.
The decision of halting the trading has received resentment from the Wall Street Bets and cryptocurrency community. Moreover, the unusual move experienced negative praise from various key members of the crypto fraternity. The news has witnessed traders over the stock and cryptocurrency markets call as an offensive play. Additionally, this week has been an excellent week for the stock market. Small stocks have seen exciting price surge.
GameStop’s price reaches New Heights owing to Wall Street Bets
GameStop’s share price has increased by 2,000% after the commencement of January. All recognition to an earlier little-known Reddit group named Wall Street Bets. The combination of forum members has created a wave in GME, clutching short-sellers of the stock. In doing so, they caused losses on investment management firms. One selective firm, Melvin Capital, experienced tremendous losses on the stock. Intellectuals consider Melvin had the most prominent short position on GME. Melvin Capital exited its temporary position earlier this week. However, that hasn’t prevented the significant climb. Moreover, GME touched $400 before the suspended trading declaration.
Moreover, Democrat Alexandria Ocasio tweeted that she objected to Robinhood’s choice of abruptly discontinuing transactions related to the stocks that underwent Reddit-inspired exciting rises this week. The House representative from New York reported the decision as “unacceptable”. They combined that Congress required to apprehend more about Robinhood’s ruling on a hearing by the U.S. House Committee on Financial Services.
Further, in December, Robinhood was penalized $65 million by the SEC over its negligence to adequately reveal its practice of trading clients’ orders to market makers. In the same month, the Massachusetts regulators charged the firm with a complaint. One area of concentration for the investigation is Robinhood’s offensive strategies to entice innocent investors and gamify approaches to manipulate consumers.