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Event

Robinhood trading restrictions of 2021

Robinhood's temporary limits on customer purchases of GameStop and other volatile stocks, 28 January to 5 February 2021.

4 links, 4 backed by primary records

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Dates
28 Jan 2021 – 5 Feb 2021
Also known as
Early 2021 Trading Restrictions

Connections 4

involved

  • GameStop restricted security Primary record 1
  • Robinhood Markets imposed the restrictions Primary record 12

    Restrictions ran from 28 January to 5 February 2021, through Robinhood Securities, its clearing broker.

part of

caused by

Timeline 2 dates
  1. 28 Jan 2021 – 5 Feb 2021 Robinhood trading restrictions of 2021
  2. 28 Jan 2021 – 5 Feb 2021 Robinhood trading restrictions of 2021 part of GameStop short squeeze
Proof 5 sources
  1. Robinhood Markets, Inc. registration statement (Form S-1), 1 July 2021, Robinhood Markets, 1 Jul 2021. Primary record
    RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (the “Early 2021 Trading Restrictions”).
    As a result, RHS temporarily limited customer purchases for certain volatile securities from January 28 to February 5, 2021 in order to comply with its deposit requirements.
    Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities
  2. Keeping Customers Informed Through Market Volatility, Robinhood Markets, 28 Jan 2021. Primary record
    In light of recent volatility, we restricted transactions for certain securities to position closing only.
  3. Staff Report on Equity and Options Market Structure Conditions in Early 2021, U.S. Securities and Exchange Commission (staff), 14 Oct 2021. Primary record
    Then, as the end of January approached, several retail broker-dealers temporarily prohibited certain activity in some of these stocks and options.
    For example, Robinhood and Interactive Brokers stated that in some cases, investors would only be able to sell their position in certain securities and not open a new position.
    Instead, some of the impacted broker-dealers maintained that the trading restrictions were a reaction to margin calls and capital charges imposed by NSCC in response to the extraordinary volatility in GME and other stocks.
  4. What happened this week, Robinhood Markets, 29 Jan 2021. Primary record
    this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten-fold. And that’s what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on
  5. Testimony of Vladimir Tenev, Robinhood Markets, Inc., before the House Committee on Financial Services, 18 February 2021, House Committee on Financial Services, 18 Feb 2021. Primary record
    the trading limits we put in place on GameStop and other stocks were necessary to allow us to continue to meet the clearinghouse deposit requirements that we pay to support customer trading on our platform.
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