Robinhood says it temporarily curbed the purchase of certain securities as the deposit requirement increased tenfold – tech2.org

Robinhood says it temporarily curbed the purchase of certain securities as the deposit requirement increased tenfold


FILE PHOTO: The Robinhood app is featured on a screen in this photo illustration on January 29, 2021. REUTERS / Brendan McDermid / Illustration

(Reuters) – Online broker Robinhood, one of the hottest spots in this week’s retail-trading frenzy, said it imposed temporary purchase restrictions on low securities as clearing house-mandated deposit requirements for equities grew tenfold. Gaya.

“…. The amount we needed to deposit with the clearing house was so large – accounting for hundreds of millions of dollars in deposit requirements with individual volatile securities – that we needed to make purchases in those volatile securities. There was a move to limit. We can comfortably meet our needs, “it said in a blog post late Friday night.

Robinhood’s duty-free and easy-to-use app has made it popular with a new generation of small-time businessmen and its restrictions on Thursday led to a huge return of high-profile politicians and celebrities.

Retail investors using Robinhood and other apps drove the so-called “Reddit Rally”, which pushed shares of other companies on social media platforms, including Gamestop Corp and Reddit, resulting in a huge backlash for large hedge funds that shorten stocks Damage done.

Reporting of Rama Venkat in Bengaluru; Editing by Raju Gopalakrishnan

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