GameStop stock price ends 400% higher on the week as Robinhood allows holders to buy only one additional share

Online brokerage firm has indeed lifted its restrictions on opening new positions in certain stocks, including GameStop (NYSE: GME). However, the latest reports note that Robinhood is now allowing GameStop stock holders to only buy one additional share.

Fundamental analysis: “Protecting interests of the company”

CNBC reports now that Robinhood added nearly 40 new names on the list of stocks that are under this new restrictive trading regime. Those who are already holding GME stocks are allowed to buy one share and up to five options contracts.

“Opening new positions in the securities listed in the table below is currently allowed, but limited,” Robinhood said in the help center message.

Earlier, Robinhood said its decision to restrict trading on certain stocks including GameStop was for the best interests for the company and its users, said chief executive Vlad Tenev. 

“In order to protect the firm and protect our customers we had to limit buying in these stocks,” Tenev said.

After a turbulent couple of days including speculative retail trading, the financial services company has prohibited buying a group of stocks, including GameStop and AMC Entertainment. 

In other words, Robinhood only allowed users to sell positions in these securities, lifted margin requirements, and warned that it would close certain positions immediately if the trader was at risk of not having the necessary collateral.

“We just haven’t see this level of concentrated interest market wide in a small number of names before,” added Tenev. “We do believe that you should be able to buy and sell the stocks that you want to.”

After trading ended on Thursday, the company announced limitations on buying of this group of stocks.

Robinhood’s decision to restrict trading on these securities triggered outrage among its clients, however, the company argued it made the move to comply with capital requirements instructed by the U.S. Securities and Exchange Commission for broker-dealers.

Technical analysis: Huge gains recorded

GameStop stock price closed at $325.00 or 67.87% higher on the day. Shares gained 400% since the beginning of this week. Despite trading conditions, retail traders found ways to get on the long side of the market.

GameStop daily chart (TradingView) Summary

Robinhood is only allowing GameStop stock holders to buy one additional share of GameStop and up to five options contracts. Still, shares closed 400% higher on the week.

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