Ameritrade restricts trading in GameStop, AMC as trading platforms struggle to keep up with historic volume
Justin Sullivan/Getty Images
- Ameritrade said on Wednesday it had restricted access to GameStop, AMC, and “other securities” as retail traders send markets for a loop.
- Ameritrade’s mobile platform was down for about an hour Wednesday morning due to high trading volumes.
- Retail traders are hoping to take advantage of short and gamma squeezes that can skyrocket share prices.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Ameritrade has restricted access to GameStop, AMC, and “other securities” as retail traders continue to send the markets for a loop.
“In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME, $AMC, and other securities. We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors,” Ameritrade said in a statement.
Ameritrade saw “unprecedented volumes” on Wednesday after retailer traders piled into heavily-shorted stocks.
The platform announced in a tweet that its mobile app had crashed due to the surge. About an hour later, it tweeted the problem had been resolved and apologized to customers for the inconvenience.
Ameritrade was one of several platforms, including Robinhood and E*Trade, that experienced outages as the number of retail trades soared in a wild day for the markets.
The trading platforms’ problems largely stem from Reddit’s WallStreetBets crowd, which now boasts over 2.2 million members.
Traders on the platform are betting against short-sellers hoping to cause short and gamma-squeeze conditions that lead to monumental near-term price appreciation.
The most talked-about name in the Reddit trade has been GameStop. Shares of the once-forgotten retailer have skyrocketed more than 1,200% since WallStreetBets first piled in on January 11. The move cost short-sellers billions of dollars in losses in just a few weeks.
Now the phenomenon has gone mainstream, and trading platforms are struggling to to keep up with the retail volumes.
Powered by WPeMatico