Name: GameStop and AMC trading restricted by TD Ameritrade, Schwab, Robinhood others
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GameStop and AMC trading restricted by TD Ameritrade, Schwab, Robinhood others

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Some major brokerage houses have begun to respond to a frenetic surge in the price of shares of certain companies that has been attributed to rabid buying by individual investors inspired by social-media platforms. On Wednesday, TD Ameritrade said it was restricting trading in GameStopand AMC Entertainment Holdingsalong with other names, amid a triple-digit percentage surge in the price of those companies in recent days.“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,” a spokeswoman for TD Ameritrade told MarketWatch, referring to the ticker symbols of the companies. “We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors.” Charles Schwab, which bought TD Ameritrade but operates it as an independent retail brokerage, said that it has tightened margin requirements in some of those stocks, including GameStop. A Schwab spokeswoman said that the platform changed its margin requirements, limiting how much an investor can borrow, on Jan. 13 and said it has placed “restrictions in place on certain transactions in GME and other securities.” On Thursday,announced that , it put GameStop, AMC, BlackBerry Limitedretailer Express Ltd.and Koss Corp.option trading into liquidation only due to the extraordinary volatility in the markets. Meaning investors could only unwind their positions, not create new ones. “In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice,” the brokerage said. “We do not believe this situation will subside until the exchanges and regulators halt or put certain symbols into liquidation only. We will continue to monitor market conditions and may add or remove symbols as may be warranted.” The restrictive moves come as shares of videogame retailer GameStock have shot up 1,600% in January, as traders gathering in online chat forums have gone on to take large bets on the stock using options, often out-of-the-money calls that pay off only if the stock rises in value over a set period. Traders on sites like Reddit’s WallStreetBets, and using trading platforms including Robinhood (which in its initial conception was meant to be a social platform organized around the trading of stocks), have clashed with hedge-fund investors, sparking a battle between prominent Wall Street short sellers and individual investors in GameStop shares. See: A Robinhood spokeswoman said that officials at the trading platform “continuously monitor the markets and adjust as we feel necessary for the benefit of our customers.” Robinhood said it also moved raised requirements for GameStop and AMC to 100%, emphasizing that Robinhood doesn’t allow shorting of equities or allow customers to trade naked options. However, the recent run-up in GameStop, and AMC Entertainment, has been spilling over into other areas of the market, with the likes of Bed Bath &amp; Beyondand retailer Express Inc. rocketing on Wednesday. Read: News alert: Recent volatile trade has made some on Wall Street uneasy, with worries of a rapidly inflating bubble. The Dow Jones Industrial Averagethe S&amp;P 500 indexand the Nasdaq Composite Indexwere all trading lower on Wednesday. Regulators have been mindful of the recent action, with William Galvin, Massachusetts’s secretary of the commonwealth, that he was watching the action play out. “This is certainly on my radar,” Galvin said. “I’m concerned, because it suggests that there is something systemically wrong with the options trading on this stock.”U.S. stocks opened sharply lower Tuesday as investors reacted to a stronger-than-expected inflation reading for August. The Dow Jones Industrial Average undefined dropped more than 500 points, or 1.7%, soon after the opening bell, while the S&amp;P 500 undefined fell 2.2% and the technology-heavy Nasdaq Composite undefined dropped 2.9%, according to FactSet data, at last check. The U.S. Bureau of Labor Statistics reported Tuesday that the consumer price index showed U.S. inflation rose 0.1% in August for an annual rate of 8.3%. Economists polled by The Wall Street Journal had forecast that CPI data would show a 0.1% drop in August. So-called core inflation, which excludes food and gas prices, rose 0.6% last month. The core CPI reading was also more than forecast, fueling investor concerns that the Federal Reserve may need to be more aggressive fighting inflation through large interest rate hikes that risk triggering a recession.SearchVisit a quote page and your recently viewed tickers will be displayed here.Search TickersNo results found

Some major brokerage houses have begun to respond to a frenetic surge in the price of shares of certain companies that has been attributed to rabid buying by individual investors inspired by social-media platforms. On Wednesday, TD Ameritrade said it was restricting trading in GameStopand AMC Entertainment Holdingsalong with other names, amid a triple-digit percentage surge in the price of those companies in recent days.“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,” a...

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Mark DeCambre

MarketWatch is a website that provides financial information, business news, analysis, and stock market data. Along with The Wall Street Journal and Barron's, it is a subsidiary of Dow Jones & Company, a property of News Corp. Notable contributors include Mark Hulbert and Francine McKenna.

GameStop and AMC trading restricted by TD Ameritrade, Schwab, Robinhood others

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