TD Ameritrade Restricts Trading Of GameStop AMC Stock
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Investors are making some big deals with shares of GameStop.
GameStop's stock continues to make big moves Wednesday, surpassing $300 a share, [/personal-finance/reddit-sent-amc-and-gamestop-stock-to-the-moon-why-and-what-happens-now/ fueled by Reddit users taking on Wall Street] ([/personal-finance/gamestops-stock-spike-lingo-what-reddits-wallstreetbets-vocabulary-means/ here's what it means]). [/personal-finance/gamestop-frenzy-has-you-wanting-to-invest-read-these-tips-before-you-do/ Investors looking to make some trades] faced multiple issues this morning trying to log in to their preferred [/personal-finance/best-robo-advisor/ investing sites and apps] as many were experiencing service disruptions, [ according to] Bloomberg. The [/news/reddit-makes-amc-gamestop-stock-go-wild-this-insane-ponzi-scheme-cant-last/ frenzy over GameStop stock] created a [/news/as-gamestop-stock-soars-so-do-the-memes-best-twitter-and-reddit-reactions/ wealth of memes], but also led to one brokerage service hitting the brakes, [/news/reddits-wallstreetbets-is-back-taking-on-gamestop-stock-after-intentional-lockdown/ the subreddit to go private and a Discord server shutdown for violating the company's terms of service].
What does GameStop's skyrocketing stock have to do with...
An image circulating on social media Wednesday just after noon ET showed an apparent warning from TD Ameritrade saying it put restrictions on the trading of stocks for GameStop, AMC and others. The brokerage firm confirmed the restrictions according to a spokesperson saying "these decisions out of an abundance of caution amid unprecedented market conditions and other factors."
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"In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME [GameStop], $AMC [AMC Theaters] and other securities," reads the TD Ameritrade message.
A TD Ameritrade spokesperson says the restrictions made include increasing requirements needed to borrow money for stocks known as a [ margin] and limiting transactions such as [ short sales].
"It is not uncommon for us to make such decisions, which we consider on an individual basis, in the interest of mitigating risk," the spokesperson said Wednesday via email. "We have been adjusting our requirements for several days as we continued to see trends indicating unusual volume in an unprecedented market environment, which appear to be divorced from traditional market fundamentals. We have made what we believe to be prudent and appropriate decisions to place some limits on certain transactions for certain securities."
The fervor over stock trading hasn't gone unnoticed. Nasdaq CEO Adena Friedman told [ CNBC] Wednesday that if there is any market manipulation going on, they may halt the trading of a stock to investigate. AMC is listed on Nasdaq, while GameStop is traded on the New York Stock Exchange.