- Ameritrade said on Wednesday it had restricted access to GameStop, AMC, and “other securities” as retail traders send markets for a loop.
- Ameritrade’s mobile platform was down for about an hour Wednesday morning due to high trading volumes.
- Retail traders are hoping to take advantage of short and gamma squeezes that can skyrocket share prices.
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Ameritrade has restricted access to GameStop, AMC, and “other securities” as retail traders continue to send the markets for a loop.
“In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME, $AMC, and other securities. We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors,” Ameritrade said in a statement.
Ameritrade saw “unprecedented volumes” on Wednesday after retailer traders piled into heavily-shorted stocks.
Ameritrade was one of several platforms, including Robinhood and E*Trade, that experienced outages as the number of retail trades soared in a wild day for the markets.
The trading platforms’ problems largely stem from Reddit’s WallStreetBets crowd, which now boasts over 2.2 million members.
Traders on the platform are betting against short-sellers hoping to cause short and gamma-squeeze conditions that lead to monumental near-term price appreciation.
The most talked-about name in the Reddit trade has been GameStop. Shares of the once-forgotten retailer have skyrocketed more than 1,200% since WallStreetBets first piled in on January 11. The move cost short-sellers billions of dollars in losses in just a few weeks.
Now the phenomenon has gone mainstream, and trading platforms are struggling to to keep up with the retail volumes.