Yesterday I told you about a developing story, a Reddit group started buying up stocks that Melvin Capital and other hedge funds were shorting. If the price goes up the hedge funds lose their trade and in one case they had shorted not only more than they could cover, but they also shorted for more than what their fund was worth putting them in an insolvent position.
The story spread across the Internet and more people started buying the stocks the hedge funds were shorting. Causing liquidity and solvency problems for these large hedge funds it briefly appeared that average every day people were going to be able to win a trade and "Long" out some hedge funds.
Today's update is Robinhood and other exchanges that were hosting these trades just stopped allowing average people to trade these stocks. Meanwhile, the hedge funds are free to make trades.
Robinhood confirmed that it has placed restrictions on several stocks due to volatility. “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,” the blog post read.
The fight isn't over yet, there has been a lawsuit filed on Robinhood.
While the movement to Long the trades has been apolitical, mending anger between political groups.
The edge for the Hedge funds comes with it's political power.
Source:
Keep an eye on this situation it is a revolution of sorts!
@whatsup