Local broker Stake forced to suspend GameStop trading

GameStop shares surged more than 1500 per cent last week as an army of retail day traders on Reddit forum WallStreetBets rushed to buy shares in order to create a “short squeeze” against major US hedge funds that had bet against the struggling company’s share price.

“To be clear, this is not a decision Stake has made. As DriveWealth is our broker-dealer, we can only reflect the securities they make available. As such, we are unable to confirm when this may change,” it said in a statement on Tuesday evening.

Trading platform Robinhood came under fire last week after it also stopped its users from buying more GameStop shares and Stake copped flack from users on Twitter after the announcement.

“Regardless of what your broker-dealer stipulates, or whether it is due to increased capital requirements, the fact that you are halting trading on those securities right now, places your platform in the same rubbish bin as Robinhood. Appalling,” tweeted one user.

Brokers are required to provide cash or capital guarantees to ensure funds are available through the settlement process. It is usually about 10 to 15 per cent of a trade’s value but can vary significantly based on stock volatility.

This content was originally published here.