That'll learn them nerds.
Something bad is about to go down at Robinhood.
One day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be bought at a time, effectively shutting down in all but name (it couldn't risk another day of furious public outcry and massive client departures if it blocked trading completely).
However, just before the close, things got downright surreal when in a blog post the broker - which should probably change its name from Robinhood to Suit - made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 51 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share!
In other words, as of this moment, no client is allowed to one more than 1 share in names like GME, AMC, AG, BBBY, BYND, WKHS and many others. Even boring, low vol names like GM and SBUX are limited to just one share.
This is what the blog post said:
"The table below shows the maximum number of shares and options contracts to which you can increase your positions. Please note that these are aggregate limits for each security and not per-order limits, and include shares and options contracts that you already hold. These limits may be subject to change throughout the day."
Panicked clients who are wondering if this means that their current holdings which exceed 1 laughable share will be forcefully liquidated can breathe for now: the company said that "outside of our standard margin-related sellouts or options assignment procedures, your positions will not be sold for the sole reason that you are currently over the limit. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit." (we expect that to change on Monday, if the company is still around.)
In other words, virtually nobody can buy any new securities.
https://www.zerohedge.com/markets/robinhood-caps-maximum-holdings-36-stocks-just-one-share
