Wall Street hedge funds have lost billions trying to profit from the falling share prices of GameStop Corp. (NYSE: GME), AMC Entertainment Holdings, Inc. (NYSE: AMC), BlackBerry Limited (NYSE: BB), Nokia Corporation (NYSE: NOK), and others.
Retail traders have been buying these stocks relentlessly in order to squeeze the short seller and force them to cover their positions for a loss.
But Wall Street fired back this morning by restricting buying on many of the hottest plays in the market but still leaving shareholders the option to sell.
The popular trading app Robinhood stated in a blog post, “we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK.”
With retail traders unable to buy but still allowed to sell, the market is now tilted in favor of the short sellers.
Legendary penny stock trader Timothy Sykes, who thrives on market volatility, was blown away. He described the action taken by brokerages as “sad” and pointed out it was intended “to hurt the little guy.”
If you had asked me months ago if I thought brokers would purposely go down/have issues to hurt the little guy I’d say you were crazy, but now with Robinhood, Etrade & IB blocking/issues on plays $AMC $BB $BBBY $EXPR $GME $KOSS $NAKD $NOK $SNDL $NAKD I think differently, it’s sad
Share prices in many of these hottest plays tumbled this morning once the restrictions went into effect.
This is a historic time for the stock market and one of the first times retail investors have banded together to take on the giants of Wall Street.
To be clear, hedge funds have always counted on the retail traders to take the other side of their trades. But with the shoe on the other foot, it appears they’re working to rewrite the rules of the game.
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