More Brokers Restrict Trades Of AMC, GameStop, Citing Volatility

The online boom in the stock price of such companies as GameStop has gained the attention of brokers, prompting moves to curb the wild trading activity.

The video game retailer’s price per share has skyrocketed by almost 2,000 percent since the start of 2021. The share price was more than $350 on Wednesday (Jan. 27).

CNBC reported Thursday that brokers have clamped down on the sale of GameStop shares and options. Free-trading pioneer Robinhood and Interactive Brokers both started to rein in trading, following similar actions by Charles Schwab and TD Ameritrade on Wednesday.

“We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities,” Robinhood said in a Thursday (Jan. 28) blog post. These included GameStop and AMC.

Robinhood said it had also “revamped and expanded” the educational material it offers online — including a lengthy article titled “The stock market has been super volatile — How can I make sense of it?”

Interactive Brokers told CNBC that it had also put restrictions on such stocks as AMC and GameStop. The company said that the market volatility in these stocks is unlikely to “subside until the exchanges and regulators” take action.

Online brokerages Robinhood, Charles Schwab and others were hit by outages Wednesday as amateur traders on Reddit had further fueled the rapid rise of GameStop and other stocks.

TD Ameritrade put limits on transactions on shares of GameStop, AMC and others. “We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors,” TD Ameritrade spokeswoman Margaret Farrell said.

GameStop shares have been a favorite of members of the Reddit forum WallStreetBets, with investors flooding the market and driving up prices. The upstarts are betting against hedge funds that had been sure that shares in GameStop, a chain stuck in the world of brick-and-mortar stores, would continue to fall.