Crackdown Arrives: Interactive Brokers Joins Robinhood, Blocks Buying Of Gamestop, AMC, Others

Update 1017 EST: Bloomberg is reporting that the SEC and Fed will likely take "little action" over the trading in GameStop (GME) and other names - but that it may include a trading suspension in the names.

Analysts told BBG: “We do not believe the SEC will issue an emergency order nor will the Fed change margin requirements. The only possible action that will potentially be taken is the SEC suspending trading in one or more of the names for one to two business days”

Update 0950 EST: Robinhood (once again) appears to be down. There's no word on whether the disruption is just from the volatility or whether or not it is directly related to the platform's ban of buying certain equities:

ROBINHOOD SAYS ISSUES WITH EQUITIES, OPTIONS, CRYPTO TRADING
ROBINHOOD SAYS DISRUPTION WITH IOS, ANDROID AND WEB APP
ROBINHOOD SAYS EXPERIENCING SERVICE DISRUPTION

Update 0925 EST: Interactive Brokers has joined Robinhood and has put option trading in some names into liquidation. This headline crossed the terminal around 0925EST:

INTERACTIVE BROKERS PUTS SOME OPTION TRADING INTO LIQUIDATION

In a statement to CNBC, IB said: 

“As of midday yesterday, (1/27/2021) Interactive Brokers has put AMC, BB, EXPR, GME, and KOSS option trading into liquidation only due to the extraordinary volatility in the markets. In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice. We do not believe this situation will subside until the exchanges and regulators halt or put certain symbols into liquidation only. We will continue to monitor market conditions and may add or remove symbols as may be warranted.”

Additionally, Robinhood has released the following statement:

“We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including AMC, BB, BBBY, EXPR, GME, KOSS, NAKD and NOK. We also raised margin requirements for certain securities.”

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William K. 3 weeks ago Member's comment

I am wondering just how all of those folks who bought could make the money and get rich. My understanding of the way to "get rich quick" in stocks is to buy low and sell high. The problem arises when nobody wants to BUY HIGH. Holding shares with inflated prices does not seem like a good plan, but rather to unload those shares, take the money, and run, or at least step back a bit.

Of course Ido hope that all who gambled on being able to sell before the turn-around did not invest more than they could afford to lose.

Alexis Renault 4 weeks ago Member's comment

This is all so baffling!

Flat Broke 4 weeks ago Member's comment

$GME and its like: I am watching Thos. Peterffy of #InterActiveBrokers on Bloomberg who shut down trading by retail on this short squeeze and options. I had considered a switch to his platform, but his poor defense of his actions and the disproportionate effect on retail investors is morally indefensible. I don't trade this stock or its options, but I would never trade on #RobinHood, #IAB, or #ETrade for this action. They are fine with the short shenanigans of large traders, but when retail profits they shut it down. They should all go down in a fiery then smoldering, continued, very expensive litigation. The market is, clearly, rigged against smaller players and this is perpetuated by the brokerages that serve them. Liquidate SAC or those who made naked shorts, not those who saw their error and tried to, very legitimately, profit.

Jimmy Richards 4 weeks ago Member's comment

No, he’s legit. He's scared $GME will cause a financial crisis. If clearing house goes tits up then whole market will dump and hedges are broken

Flat Broke 4 weeks ago Member's comment

Liquidation of accounts is automated. Mr. Peterffy is concerned not a whit with the integrity of markets. He's concerned with his vast fortune.

Jimmy Richards 4 weeks ago Member's comment

I don’t think so he’s a former option guy. He’s figured out apex is fucked and they can take down retail brokers and the entire options market. It’s like 2008 but through apex then occ

Flat Broke 4 weeks ago Member's comment

I haven't tallied the actual financial impact of these options trades, but naked shorting is illegal, to the best of my knowledge. As such, recouping should be possible through clawback of the stocks written upon. If, on the other hand, they have permitted the writing of naked shorts, those brokers that have permitted the same should suffer the loss if they cannot liquidate the position upon which options were written.

Flat Broke 4 weeks ago Member's comment

Options trading is, inherently, zero-sum. There should be no net loss unless naked shorting occurred and was permitted on a large scale.

Jimmy Richards 4 weeks ago Member's comment

it’s not about short shares it’s about short calls. If the short calls end up far Itm like $400 then apex will go bk and most brokers will too.

Daniel Charles 4 weeks ago Member's comment

It's not about short shares it’s about short calls. If the short calls end up far Itm like $400 then apex will go bk and most brokers will too

Dan Jackson 4 weeks ago Member's comment

The option software screwed up and overwrote.

Bill Myers 4 weeks ago Member's comment

Sounds like textbook moral-hazard to me, but I understand the concern for systemic contagion. Hopefully, there are no cryptocurrency derivatives!.

Samantha Wolf 4 weeks ago Member's comment

You can still buy game stop on Webull. $GME

Adam Reynolds 4 weeks ago Member's comment

I don't understand why anyone would want to buy $GME now. It's completely overvalued at the moment. No way it's worth that much!

Stock Picks 4 weeks ago Member's comment

What's going on is absolutely insane!!!!!!!!