Last week the financial market was stunned to find out that Robinhood, a U.S. based brokerage house popular among millennials and retail traders, halted trading on GameStop (GME) shares. Furious users turned their back and boycotted Robinhood by shutting off their accounts and leaving the broker.
GameStop held the headlines as retail traders in the subreddit group WallStreetBets took the other side of the short-selling in GameStop stock. A massive short squeeze started, sending the shares of GME above $400. However, due to liquidity constraints, the broker, Robinhood, was forced to halt trading because it needed to place collateral with the clearinghouses. Trades typically clear in T+2, and the two days may mean Robinhood is going out of business. As such, the decision to halt trading was a no brainer.
This was not the first time Robinhood got into trouble, back in December of last year, the company had to settle the charges brought by the U.S. regulator, the Securities and Exchange Commission (SEC), regarding misstatements on how it routes its customers’ order. Robinhood paid $65 million to settle those, and now it tapped credit lines to survive.
Robinhood Alternatives: Where to Still Trade GME stock?
As Robinhood halted trading on GME shares, it helped ease the pressure on the short-selling hedge funds. Moreover, the broker allowed traders to close their longs, but not allowed them to open new longs. In other words, it allowed only the selling, not the buying. As such, the retail traders viewed it as the broker siding with the hedge funds (i.e., the enemy), and left in search for other brokerage houses.
Robinhood was founded on the desire to “democratise finance for all”. It grew with the retail sector in the United States and became one of the first names to offer fractional shares trading. One of their best-offering was to give traders access to cheap derivative solutions, albeit leveraged ones. This is exactly what hunted the firm down to the point of halting trading in the GME last week.
So where can you still trade the GME stock? Below we list the best Robinhood alternatives where you can open an account and place your first buy today.
E-toro runs a fairly large business specialized mostly in CFD (Contracts for Difference). Among thousands of markets, the broker offers access to GME, so that traders may participate in the increased volatility and price action on the ticker.
Skilling offers access to over a hundred financial instruments and the GME ticker is among them. Besides shares, investors may participate in the currency and the cryptocurrency markets, as well as commodities and indices. Regulated by CySEC and authorized by FCA, Skilling has very competitive spreads for the rental community.
Plus 500 is another broker specialized in CFD trading and which is offering the possibility to trade the GME ticker. Besides shares, the broker also offers trading in most FX pairs, options, cryptocurrencies or commodities.