CMC restricts ‘memestock’ shorting amid Gamestop frenzy
Trading platform CMC Markets has restricted short selling in Gamestop, AMC and other so-called “meme stocks” following an attack on hedge funds by Reddit traders.
Last week day traders in r/wallstreetbets flocked to Gamestop lifting its share price to new heights in what some called a war against hedge funds.
Gamestop is the most shorted stock on Wall Street but with access to low-cost trading platforms Reddit investors have started to buy up stocks in a bid to cause a “short squeeze”.
Attention has now turned to other nostalgia stocks such as AMC Entertainment and Blackberry which have also seen huge short positions taken out on them.
CMC Markets today confirmed it had increased margins and is only allowing long positions in Gamestop, AMC, Blackberry, Bed Bath and Beyond, Express Inc and Nokia.
A spokesperson said: “CMC’s position is under continued review and subject to change.”
At the height of the frenzy last week, trading app Robinhood came under fire for limiting users buying shares in Gamestop and other stocks. Similarly CMC’s peer IG Group announced it had started to restrict new spread-bets and other trades in Gamestop and AMC due to “extreme volatility”.
The FTSE 250-listed broker said over the weekend it was not allowing any new positions to be opened in either stocks.
Today Reddit investors are focusing their attention into silver, which soared as much as 11.2 per cent to near an eight-year peak.