The Real Reason Robinhood Is Blocking Some of Your Trades
This past year saw riots all over the country in the face of rising political tensions. Now, in the first month of 2021, we’re seeing an online revolt on the heels of Robinhood and other brokers restricting or outright blocking you from trading certain stocks.
For some background, GameStop Corp. (NYSE: GME), as well as other highly shorted stocks like American Entertainment Holdings Inc. (NYSE: AMC) and Nokia Oyj (NYSE: NOK), among others, have been targets of a short squeeze.
GameStop was the first of a group of stocks targeted by retail investors from a subreddit called “WallStreetBets,” self-described “degenerates” who banded together to “stick it” to Wall Street.
The group noticed that GME was one of the most heavily shorted stocks by hedge funds, and collectively they began purchasing shares. This resulted in a parabolic move in prices, with GME increasing some 1,600% in a matter of days.
Those kinds of moves don’t just happen. The last time we saw we saw a squeeze like this was in 2018 with Tilray Inc. (Nasdaq: TLRY), a cannabis company that saw its stock shoot up 1,400%. Robinhood wasn’t blocking stocks then…
Now, about a week since the start of the GameStop short squeeze, the news of Robinhood and other brokers restricting and outright banning some trades has ignited an online firestorm that has politicians from both sides of the aisle taking notice.
Fully agree. 👇 https://t.co/rW38zfLYGh
— Ted Cruz (@tedcruz) January 28, 2021
The Real Reason Behind Robinhood Blocking Stocks
After the “WallStreetBets” crew forced multiple hedge funds close and even into bankruptcy, Robinhood stepped in to put a stop to it.
The California-based company made a name for itself by trying to level the trading field. The pioneers of free trading changed the entire industry, and now it’s not letting users trade freely.
But why?
Because it started to affect Robinhood’s revenue.
The e-brokerage company operates without commissions, so its money has to come from somewhere. It comes from Wall Street firms buying your data, including the trades you make.
Robinhood’s biggest source of income is a firm that’s lost almost $3 billion as a result of this short squeeze…
Check out my short video on how short squeezes happen and get the real reason behind Robinhood and others blocking stocks.
P.S. Did you lose money or miss out on any big wins because of the restrictions? Are you considering changing brokers now? Share your thoughts on the ongoing short squeeze mania with us at wptestimonial@gmail.com, and we could feature your story in an upcoming piece.
9 Comments
Great job of explaining the situation that’s taking place today .
I thank you and keep up the good work.
How can I become apart of a Cival Suit against Robinhood? I bought shares of Gamestop and watch it’s value climb.Fearing it reached it’s prak, I sold my shares. As I watched it continue to climb, I tried to get back onboard, but was denied the ability to buy anŷmore shares. Robinhood said :” Robinhood does not support this stock”!
I recommend the legislature pass new laws to prevent the same from happening again by Robin hood, brokers, trading companies. Those who violated public trust should be sued by Class Action Civil Suit. The trading should have been stopped immediately without punishment to those who found a chink in the system and took advantage.
If Robinhood platform is about to be sued I will have to consider ANOTHER platform🙃😠🔥
not sure if anyone else just saw the latest restrictions… But I just closed my account with Robinhood
The could have just raised the margin requirements if they were short of money. Some say that was part of the reason, they stopped the buying, the brokerages ran out of money
The ‘short squeeze’ is a thing because it IS what the Big Money does. It is a maneuver by hedge fund manager’s and others who manage large accounts to basically scalp retail investors. They do it at will, and all the time, so it is refreshing to see these big guys get a taste of their own medicine. It is a sort of balancing the table and I like it.
It is beyond a doubt that the extremely powerful are out of control. Who needs a private submarine?? Monopoly laws are not enforced, there is a revolving door between the big banks and the treasury and the internet is the new wild card in historical workings of capitalism and now a possible challenge to the dominance of the ultra powerful.
Hedge funds are market manipulators. After selecting a stock which they intend to manipulate they use the internet and other brokers to publish derogatory and misleading information about it in order to panic the small retail investor to sell. When the stork has tanked they buy it to cover the number of shares they shorted at the higher price. Do I feel sorry they lost a big bundle. NO
Wall Street cares diddley squat about the little guy, except to rip him off chronically. The Reddit peeps are going to try to short squeeze silver. Good luck with that. Solver has been manipulating for over a 100 years.