Robinhood raises trading limit on GameStop shares to 4 from 1

  • Robinhood clients can now buy up to four shares of GameStop, a small ease in the broker's trading limitations.
  • The unraveling of restrictions comes amid another cash injection for the free stock trading pioneer.
  • Nokia and BlackBerry trading limits remained the same.

Robinhood started easing trading restrictions on Monday, raising its trading limit on GameStop to four shares from a single share.

Robinhood's changes are slight. Clients who already own more than four shares of GameStop cannot buy any new shares.

The small ease of restrictions comes amid another cash injection for the free stock-trading pioneer.

The brokerage also raised the limits on AMC Entertainment, Express, Koss and a few of the other eight restricted stocks. Here are the new restrictions.

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Amid an increase in capital requirements from the SEC and the Depository Trust & Clearing Corporation, Robinhood put restrictions on certain stocks and options amid a retail investing frenzy in heavily shorted names last week. Reddit-obsessed traders drove GameStop's stock up more than 400% in an effort to crush the hedge funds shorting the name.

However, while GameStop's stock rose, regulatory bodies increased the amount that Robinhood needed to deposit at its clearinghouses in case the trades caused large losses. JMP Securities estimated requirements ballooned by a staggering $7.5 billion to $33.5 billion.

The restricted list tells clients how many shares and options contracts they can buy pertaining to a particular security.

GameStop shares were last down 17% after losing more than a third of their value.

Clients can buy 75 shares of AMC, higher than the earlier restriction of just 10 shares. Robinhood clients can now buy 200 shares of Express, instead of the previous cap of 20 shares. However, if a client owns more than 200 shares of Express, they cannot buy any more shares of the embattled retailer.

Nokia and BlackBerry trading limits remained the same.

Robinhood's change in policies comes amid news that it raised another $2.4 billion from investors to support its record customer growth, the company said in a blog post on Monday. This adds to the $1 billion raised last week to shore up Robinhood's balance sheet in anticipation of the rampant speculative trading. The company also tapped credit lines for more funds.

The new funding round was led by Ribbit Capital, as well as existing investors Iconiq, Andreessen Horowitz, Sequoia, Index Ventures and NEA, Robinhood said.

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