As the U.S. SEC looks into how Robinhood has handled GameStop trading, the platform has narrowed its list of restricted stocks.
Troubled stock trading app Robinhood has been narrowing the list of restricted stocks on its platform, but is still keeping major restrictions on shares like GameStop (GME).
According to its website, Robinhood has adjusted its list of restricted stocks to eight shares including GME, AMC, BlackBerry, Express, Genius Brands International, Koss, Naked Brand Group and Nokia. Robinhood previously restricted trading for as many as 50 shares on Jan. 29, CNBC reported.
As per the new restrictions, Robinhood users can still only buy one share of GameStop alongside five options contracts. AMC trading is capped at 10 stocks and options contracts.
Robinhood users who already hold a greater number of shares or contracts will have to sell their holdings in order to open more positions, the firm said:
“If you already hold a greater number of shares or contracts than the limits listed above, your positions will not be sold or closed. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit.”
Robinhood has been struggling to maintain its trading services while the r/Wallstreetbets Reddit community pumped stocks like GME to new all-time highs. On Jan. 28, Robinhood suspended GME purchases after the stock skyrocketed 1,400% from about $20 on Jan. 12. On Jan. 29, the firm also temporarily disabled instant deposits for cryptocurrency purchases, citing “extraordinary market conditions.”
The United States’ Securities and Exchange Commission subsequently hinted that it was looking into the Robinhood platform, citing concerns over “extreme price volatility of certain stocks’ trading prices.”
Robinhood’s decision to halt GME was widely criticized in the trading community, with at least 100,000 negative reviews appearing on Robinhood’s page on the Google Play Store. Despite Google’s subsequent move to scrap thousands of negative reviews with its “fake review” tracking system, Robinhood app’s rating is still down to one star, with 294,954 reviews posted at publishing time.
Amid the ongoing issues, Robinhood users launched the “#robinhoodboycott” tag on Twitter, calling on traders to move their holdings off the platform. However, Robinhood is not the only company experiencing issues due to the GameStop short squeeze. On Jan. 30, online trading platform IG Group Holdings said that it will restrict any new positions on GME and AMC due to “extreme volatility” in the market.