Robinhood trading limits have now been completely removed, once more allowing users to buy unlimited shares in GameStock and other stocks pumped on Reddit …
Reuters reports that the massive volatility seen in the stocks now appears to have fizzled out.
Robinhood lifted all the buying curbs imposed at the height of the battle between amateur investors and Wall Street hedge funds.
The videogame retailer, the initial trigger for the market slugfest, was up 8.4% in U.S. pre-market trading although the wild gyrations seen in the past two weeks appeared to have fizzled out.
Robinhood, among the fee-free online brokers that are credited with fueling the trades, said late on Thursday it had removed all buying restrictions imposed due to a surge in clearing house deposit requirements last week.
With many of the stocks involved in the so-called “Reddit rally” slumping this week, hedge funds with bearish positions on GameStop made $3.6 billion in profits compared to losses of $12.5 billion in January, financial analytics firm Ortex said on Friday.
Robinhood trading limits came under fire from app users, suspecting that the company colluded with hedge funds. The company says this isn’t the case, and that it was legally required to limit trading to comply with the liquidity requirements laid down in law.
Analysts say that it’s not impossible that we’ll see a repeat of the coordinated buying created on r/wallstreetbets, but enough small investors lost money to dampen enthusiasm for now.
“The speculation is now fading but that doesn’t mean it can’t come back a month or two months from now,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“A lot of the small investors may have gotten burnt, so it’s going to take time to heal that wound. It may not pop up in those stocks that were already attacked, but it could happen in other companies and maybe on a broader scale.”
Some of those who are still ahead remain optimistic, despite missing out on an opportunity to sell GME at a huge profit.
“GME YOLO/FOMO my second mortgage. 35k to 5mil to 300k. I WILL NOT SELL!,” read one post by a participant with the handle u/Rhollow1.
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