‘Reddit Rebellion’ drives GameStop to rally again, while US regulators eye wild trading

While some companies swept up in the so-called “Reddit rebellion” have used the opportunity to raise capital, most have said little about the volatility in their shares. GameStop did not reply to multiple requests for comment. AMC, BlackBerry and Koss did not immediately respond to requests for comment.

Restrictions imposed on Thursday were driven by the high concentration of risk in hot stocks and by increased clearinghouse capital and deposit requirements, Piper Jaffrey said.

While Robinhood eased the curbs on Friday, it was still not allowing purchases of fractional shares in GameStop and some other companies, meaning smaller investors must bet more to buy-in. The brokerage was also limiting the number of shares any one account could hold.

London-based trading platform Freetrade disabled buy orders for US stocks but will allow users to exit positions.

While the battle could limit short-sellers’ influence on the market, analysts said, the fact remained that the prices of stocks will eventually fall if they are overvalued.

“These moves … can go a lot further than people can expect, but they end with a quick move back down,” said David Starr, vice president of quantitative analysis at Simpler Trading. “People race for the exits very, very quickly.“

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