Business

Robinhood says it has temporarily curbed the purchase of some securities, with deposit requirement increased tenfold

fr24news–  The Robinhood app is shown on a screen in this photo illustration on January 29, 2021. REUTERS / Brendan McDermid / Illustration

(Reuters) – Online broker Robinhood, one of the hottest places in this week’s retail frenzy, said it has put temporary purchase restrictions on a small number of stocks, the deposit requirements mandated by the clearing house for shares that have been multiplied by ten.

“… The required amount that we had to deposit with the clearinghouse was so large – with individual volatile securities representing hundreds of millions of dollars in mandatory deposits – that we had to take steps to limit the purchase of these volatile securities. in order to guarantee we could comfortably meet our requirements, ”he said in a blog post on Friday evening.

Robinhood’s free and easy-to-use app has made it popular with a new generation of small traders, and its restrictions on Thursday drew a strong reaction from high-profile politicians and celebrities.

Retail investors using Robinhood and other apps drove the so-called “Reddit rally” that drove shares of GameStop Corp and other forbidden companies up on social media platforms, including Reddit, resulting in heavy losses for large hedge funds that had shorted stocks.

Report by Rama Venkat in Bengaluru; Edited by Raju Gopalakrishnan

Related Articles

Back to top button