(Reuters) – Online broker Robinhood, one of the most popular retail frenzy sites this week, said it imposed temporary restrictions on buying a small number of securities as they multiplied by ten mandatory deposit requirements of the clearing house.
“… the required amount we had to deposit in the clearing house was so large, with individual volatiles representing hundreds of millions of dollars in deposit requirements, that we had to take steps to limit the purchase of these volatile values to ensure we could comfortably meet our requirements, ”he said in a blog post late Friday.
The free and simple Robinhood app has made it popular among a new generation of small business traders and its restrictions sparked a strong reaction on Thursday from renowned politicians and celebrities.
Retail investors using Robinhood and other apps drove the so-called “Reddit rally” that drove the actions of GameStop Corp and other social media platform advocates, including Reddit, which caused serious losses for the big hedge funds that had reduced the shares.
Reports of Rama Venkat in Bengaluru; Edited by Raju Gopalakrishnan