Trading app Robinhood blocks users from buying GameStop, other high-flying stocks

Interactive Brokers also initiated trading curbs

The trading app Robinhood and online broker Interactive Brokers are restricting trading in certain securities because of the recent volatility in a number of stocks.

Shares of AMC Entertainment Holdings, BlackBerry Ltd., Bed Bath & Beyond Inc., Express Inc., GameStop Corp., Koss Corp., Naked Brand Group and Nokia Corp. have been restricted to “position closing only,” Robinhood said in a blog post.

TickerSecurityLastChangeChange %
GMEGAMESTOP101.74-6.99-6.43%
AMCAMC ENTERTAINMENT HOLDINGS INC8.01-0.28-3.38%
BBBLACKBERRY LTD.10.05-0.53-5.01%

The decision means traders cannot initiate new positions in shares of those companies and can only sell existing holdings. The company also raised margin requirements for certain securities.

Interactive Brokers on Tuesday shifted options trading in AMC, BlackBerry, Express, GameStop, and Koss to "liquidation only," the company said in a statement. The platform also increased margin requirements for long stock positions to 100% and for short stock positions to 300%.

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The decisions come after shares of the companies have skyrocketed in recent weeks after members of a Reddit group called WallStreetBets banded together to squeeze short-sellers out of their positions.

GameStop shares soared 1,642% from Jan. 12 through Wednesday while AMC Entertainment and BlackBerry gained 769% and 229%, respectively. The other names have also seen outsized gains.

Both Robinhood and Interactive Brokers are taking heat on Twitter for their decisions.

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"So are @robinhoodapp and @IBKR ending trading in #wallstreetbets stocks because they are losing their ass on these trades? Or maybe they dont have the cash to enable the trades at this scale?" asked Dallas Mavericks owner Mark Cuban "Anyone have any insight on their economics?"

Barstool Sports founder Dave Portnoy said, "Somebody is going to have to explain to me in what world @RobinhoodApp and others literally trying to force a crash by closing the open market is fair? They should all be in jail."