Reddit trades, in addition to GameStop, are also the crater: AMC, silver have big hits

A poster hangs in front of an AMC theater on January 27, 2021 in Chicago, Illinois. Shares of AMC Entertainment have quadrupled today as investors continue to buy in very short stocks.

Scott Olson | Getty Images

In addition to GameStop, other popular targets among Reddit marketers were hugely successful on Tuesday.

Shares of AMC Entertainment, which rose nearly 300% last week due to a sharp decline, fell 40% in morning operations. The iShares Silver Trust ETF, which was part of an attempt to thin the metal, fell 6%.

In other very small names that met last week, BlackBerry fell 10%, Express fell 31%, Koss fell 41%, Naked Brand lost 27% and Nokia fell 5% shortly after of the opening bell. Genius Brands fell 3%.

Short-term selling is a strategy in which investors borrow shares of a stock at a certain price, according to the expectations that the market value will fall from this level when it is time to repay the borrowed shares. It is a strategy that expression funds usually use.

Amid last week’s retail investment frenzy in very small names, Reddit-driven traders boosted the shares of GameStop, AMC Entertainment, Koss and others, squeezing hedge funds that reduced the names. This week, those stocks will return to Earth as Robinhood and other trading apps continue to limit stock buying and options contracts and as the trade disruption lost momentum.

Shares of GameStop fell more than 50% on Tuesday.

Currently, Robinhood allows customers to buy only 20 GameStop shares and 350 AMC Entertainment shares. Customers can make 700 Blackberry shares and 1,000 Koss shares. However, if Robinhood customers own more than the stock limit, they cannot purchase any stock.

Robinhood and other brokers are required to meet certain clearing trade deposit requirements. Due to the large trading volume, Robinhood said last week that it had to impose restrictions because the deposit requirements set by its clearing center were much higher than expected.

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