The Robinhood trading app logo is displayed on a smartphone.
Olivier Douliery | AFP via Getty Images
Robinhood began easing trading restrictions on Monday and raised its trading limit on GameStop to four single-share shares.
The unraveling of restrictions comes amid another cash injection for the pioneer of stock-free trade.
The brokerage also raised limits on AMC Entertainment, Express, Koss and some of the other eight restricted shares. Here are the new restrictions.
Robinhood restricts the trading of certain shares
Source: Robinhood
Amid rising capital requirements from the SEC and the Depository Trust & Clearing Corporation, Robinhood imposed restrictions on certain stocks and options amid a very short-term retail investment frenzy last week. Reddit-obsessed traders increased GameStop shares by more than 400% in an effort to crush the hedge fund that restricted the name.
However, as GameStop’s shares increased, regulators increased the amount Robinhood needed to deposit in its clearing centers in the event that operations caused large losses. JMP Securities estimated that requirements grew to a staggering $ 7.5 billion to $ 33.5 billion.
The shortlist indicates to customers how many stock options and contracts they can buy in relation to a particular value and Robinhood seems to be pushing back some of its limitations. Now, Robinhood customers can buy 4 GameStop shares, instead of just one.
GameStop shares fell 17% after losing more than a third of their value. Robinhood customers who own more than four GameStop shares cannot purchase any new shares.
Customers can buy 75 shares of AMC, higher than the previous restriction of only 10 shares. Robinhood customers can now buy 200 shares of Express, instead of the previous limit of 20 shares. However, if a customer owns more than 200 Express shares, they will no longer be able to purchase shares from the engaged retailer.
The business boundaries of Nokia and Blackberry remained the same.
Robinhood’s policy change comes 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 post Monday. This adds to the $ 1 billion raised last week to consolidate Robinhood’s balance sheet in anticipation of the huge speculative trade. The company also took advantage of 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, Robinhood said.