The Robinhood trading app logo is displayed on a smartphone.
Olivier Douliery | AFP through Getty Images
Robinhood began easing trading restrictions on Monday, raising its GameStop trading limit to four shares from a single share.
Releasing the restrictions comes amid another cash injection for the pioneer of free stock trading.
Brokerage also raised limits for AMC Entertainment, Express, Koss and some of the other eight restricted shares. Here are the new restrictions.
Robinhood restricts trade in certain stocks
Source: Robinhood
Amid rising capital requirements from the SEC and Depository Trust & Clearing Corporation, Robinhood has placed restrictions on certain stocks and options amid a sharp shortening retail investment frenzy last week. Reddit-obsessed traders have increased GameStop shares by more than 400% in an effort to crush the hedge fund to reduce the name.
However, as GameStop shares rose, regulators increased the amount Robinhood needed to deposit at clearing houses if transactions caused large losses. JMP Securities’ estimated requirements rose from $ 7.5 billion to $ 33.5 billion.
The shortlist shows customers how many options and options contracts they can buy on a particular security, and Robinhood seems to be removing some of its limitations. Now, Robinhood customers can buy 4 shares of GameStop instead of just one.
GameStop shares fell 17% after losing more than a third of their value.
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 shares of Express, he or she may no longer purchase shares of the retailer.
Nokia and Blackberry trading limits have remained the same.
The change in Robinhood’s policies comes amid news that the pioneer of free stock trading has raised another $ 2.4 billion from investors to support record customer growth, the company said in a blog post on Monday. This adds up to $ 1 billion raised last week to strengthen the Robinhood balance sheet in anticipation of speculative transactions. The company also operated credit lines for several funds.
The new round of financing was led by Ribbit Capital, as well as existing investors ICONIQ, Andreessen Horowitz, Sequoia, Index Ventures and NEA, Robinhood said.