The no-fee trading app, which is popular with young investors, has been strained by the high volume of trading this week in stocks such as GameStop.
Robinhood restricted the ability for users to buy select stocks including GameStop. The affected stocks include: $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. As a result of restricting those stocks.
Stockbrokers like Robinhood are legally required to have enough cash to pay customers, cover losses and have a cushion if things go wrong. This week seemed to strain Robinhood’s ability to do that, and my colleagues reported that the trading platform needed to raise $1 billion in emergency cash.