Furthermore GameStop, other popular short-squeeze targets among Reddit traders were taking big hits on Tuesday.
Percentages of AMC Entertainment, which rallied nearly 300% last week from a major short squeeze, fell 41% on Tuesday. The iShares Grey Trust ETF, part of an attempted squeeze on the metal, was down 8%.
Reddit trades start to unwind
In other heavily uncivil names that rallied last week, BlackBerry fell 21%, Express slipped 32.3%, Koss mow down 42.7%, Naked Brand lost 35.9% and Nokia dropped 7.4%. Genius Brands was down 3.2% on Tuesday.
Uncountable of the names came off their lows of the session after Robinhood announced that it was easing trading restrictions.
Unexpectedly selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value want fall below that level when it’s time to pay for the borrowed shares. It’s a strategy often used by hedge funds.
Amongst last week’s retail investing frenzy in heavily shorted names, Reddit-fueled traders drove GameStop, AMC Pleasure, Koss and others’ stock up, squeezing hedge funds shorting the names. This week, those stocks are coming disavow down to Earth as Robinhood and other trading apps continue to limit buying of stocks and options contracts and as the squash trade lost momentum.
Square’s Cash App, which picked up some frustrated Robinhood clients last week, rightful announced it’s clearing broker, Axos, is halting buys of AMC Entertainment and Nokia.
Shares of GameStop were down numerous than 60% on Tuesday.
Currently, Robinhood allows clients to buy only 100 shares of GameStop and 1,250 cuts of AMC Entertainment. However, if Robinhood clients own more than the share limit, they can’t purchase any shares.
Robinhood and other intermediaries are required to meet certain deposit requirements from trade clearinghouses. Because of the heavy trading volume, Robinhood rumoured last week it had to impose the restrictions because deposit requirements set by its clearinghouse were much greater that calculated.
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