I’m not going to get into the Gamestop thing. There are plenty of other places you can read about it. Finance Gourmet isn’t really about day-trading or riding trends like this.
What Finance Gourmet IS about is providing financial information and data to investors. I didn’t even get a chance to finish updating my Robinhood vs Stash vs Acorn post before Robinhood changed its reputation forever. (This is why I chose to just publish the mega post and keep editing it rather than waiting to fill in all the blanks)
Robinhood Halts Trades to “Protect” Traders
Robinhood today halted BUYS ONLY on several stocks that were being pushed higher by internet-based trading groups. In other words, you are welcome to sell and relieve the price pressure that is hurting hedge funds, but you can’t buy, because Robinhood is protecting you from yourself.
Robinhood is the same platform that allowed a trader to rack up millions in debt over dubious trades until he killed himself. It claims to democratize trading by offering trading to the masses, so long as those masses don’t make a mess, apparently.
But, this Gamestop thing is making its hedge fund masters uncomfortable, and well… now it needs to protect its poor, innocent, baby traders who don’t know what they are doing.
If this seems wrong to you, you aren’t the only one. Heck. They’ve got Ted Cruz and Alexandria Ocasio-Cortez agreeing on how shady this is.
Robinhood traders are furious and, rightly, looking for a new brokerage.
Some Brokers Still Accept GameStop Trades
Somebody should put together a list of brokers who never caved to stopping Gamestop trades. For example, TD Ameritrade has gone along with the NannyBroker brokerages. On the other hand, Fidelity, for example, will still process your purchase of $GME or GameStop options.
The stench of all this is that the hedge funds being hurt by the Gamestop action are free to buy and sell, and whatever else they want to do. Same with any investor big enough to own a TradeStation. But, those “little guy” traders Robinhood is supposed to be giving freedom to trade to… they can’t.
At least one mini-broker is trying to capitalize on Robinhood’s self-inflected wound.
A trading platform similar to Robinhood called Public is doubling its stock-based sign up bonus to capture attention. (I hadn’t even included them in my mega-market-trading-add review! I’ll change that going forward…)
Oh, and if you are wondering, Public will still allow you to buy Gamestop stock if you feel like it.
Update: Apparently, Public’s clearing company forced it to stop offering buy orders on Gamestop stock later in the day as well.
Should I Buy Gamestop Stock?
I’m not going to get into that, but I will say this. If you do, you are taking a very risky position and you should be prepared to lose every penny you invest. This isn’t for your kids’ college fund.
If you are an internet pirate looking to stick it to the man with a trade that you can afford to lose everything on, then do you.
If you think you catch the knife and get out with a profit. Do you.
Would I recommend it? Heck no.
But, unlike Robinhood, I know I’m not your mother.
By Brian Nelson – Brian is a former Certified Financial Planner and financial advisor. He writes for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or investment advice. At the time of publication, Mr. Nelson did not own any securities mentioned above, however, that may change at any time without notice. ArcticLlama, LLC, FinanceGourmet.com, and Brian Nelson, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.