London’s retail stock broker IG Group restricts trading of GameStop & AMC

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London’s retail stock broker IG Group restricts trading of GameStop & AMC

In what could be seen as an extraordinary move aimed at turning down the heats of a staggering slugfest between Main Street retail investors and institutional investors that soared GameStop shares’ prices as much as 2,500 per cent year-to-date, British online trading platform IG Group Holdings Plc had issued a statement on Saturday saying that it would restrict any new position on AMC Entertainment and GameStop due to “extreme volatility”.

In point of fact, latest curb on retail stock trading of GameStop and AMC shares comes over the heels of a US SEC (Securities and Exchange Commission) warning that said the US market regulators were closely observing the latest development on a Reddit social media trading discussion group-led retail-frenzy that had forced a number of big-league hedge funds to exit long-buy positions last week to cover up the losses the equity funds had digested on GameStop short-sell positions.

Aside from that, a number of US lawmakers had also raised concerns over the issue including the US President Joe Biden, nonetheless, GameStop stocks had surged again on Friday following an ease of restriction on stock brokerage firm Robinhood and wrapped up the week more than 230 per cent higher.

However, several analysts were quoted saying following IG Group decision that Robinhood might be encouraging risky trading bets, though they had also added the stock brokerage firm could not be sued since it had not breached any regulations of US SEC.

IG Group says will not allow any new position on GameStop and AMC Entertainment

If truth is to be told, latest IG Group decision came forth following an upsurge in volume in recent days, mostly meaded out of a social media group in Reddit that calls on purchasing stocks likes of GameStop and AMC which were being heavily shorted by a swathe of hedge funds.

Amid such chaotic trading landscape that almost forced Wall Street to wrap up this week with sharp losses, London-headquartered British online trading platform IG said in a statement in a tweet, “Due to extreme volatility, and to prioritise the service we give our existing clients, we are not allowing any new positions to be opened on the US stocks GameStop and AMC Entertainment.