What happened
Reddit traders are back. After licking your wounds following GameStopin (NYSE: GME) brutal decline from its highs, the army of individual investors led by Wallstreetbets appears to be trying to start a new round of small pressures.
Here’s how some of Reddit’s most popular stocks fared on Wednesday:
And
Many investors were furious when Robinhood and other brokerages placed restrictions on their clients’ ability to buy GameStop shares and other heavily sold shares in January. These moves helped end the commercial frenzy at GameStop and other popular Reddit stocks, leading to a sharp drop in prices.
Express, Naked Brand, AMC, Sundial and BlackBerry shares rebounded on Wednesday. Image source: Getty Images.
After heavy criticism from investors and regulators, Robinhood eventually moved to allow uninterrupted trading of GameStop and other stocks for which he had limited purchases. The popular trading platform said the restrictions were temporarily necessary due to the increasing capital requirements imposed by clearing houses during the commercial frenzy. Subsequently, Robinhood raised several billion dollars from investors to better meet these requirements should trading volumes increase again.
What now
Well, Reddit traders seem to be preparing to test Robinhood’s newly strengthened capital reserves. With the trading platform likely to be reluctant to impose new buying restrictions due to the reaction it faced last time, it will be interesting to see how any potential short squeezes will work without Robinhood’s interference.