The Robinhood trading app logo is displayed on a smartphone.
Olivier Douliery | AFP via Getty Images
Robinhood started easing trading restrictions on Monday, increasing his trading limit on GameStop to four shares of a single share.
The restrictions are lifted amid another injection of money for the pioneer of free stock trading.
The broker also increased the limits of AMC Entertainment, Express, Koss and some of the other eight restricted shares. Here are the new restrictions.
Robinhood restricts trade in certain stocks
Source: Robinhood
Amid an increase in capital requirements from the SEC and Depository Trust & Clearing Corporation, Robinhood placed restrictions on certain stocks and options amid a frenzy of retail investments in heavily sold names last week. Reddit-obsessed traders raised GameStop’s stock by more than 400% in an effort to crush the hedge fund that was selling the name.
However, as GameStop’s shares rose, regulators increased the amount that Robinhood needed to deposit with its clearing houses, in case the deals caused big losses. The estimated needs of JMP Securities skyrocketed from $ 7.5 billion to $ 33.5 billion.
The shortlist tells customers how many shares and options contracts they can buy for a given security and Robinhood appears to be reversing some of its limitations. Robinhood customers can now purchase 4 GameStop shares, instead of just one.
GameStop’s stock fell 17% after losing more than a third of its value.
Customers can purchase 75 AMC shares, higher than the previous restriction of only 10 shares. Robinhood customers can now purchase 200 shares of Express, instead of the previous limit of 20 shares. However, if a customer owns more than 200 Express shares, they cannot buy more shares from the distressed retailer.
The trading limits for Nokia and Blackberry have remained the same.
The change in Robinhood’s policies came amid news that the pioneer of free stock trading raised another $ 2.4 billion from investors to support its record customer growth, the company said in a blog on Monday. That adds to the $ 1 billion raised last week to support Robinhood’s balance sheet in anticipation of rampant speculative trade. The company also used credit lines to raise more funds.
The new round of financing was led by Ribbit Capital, as well as by existing investors ICONIQ, Andreessen Horowitz, Sequoia, Index Ventures and NEA, said Robinhood.