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Robin Hood soars after retailers flock to stocks

Robin Hood Update

Robin Hood, a trading app used by many retail investors to drive a ferocious rally of “meme stocks” earlier this year, has acquired the characteristics of meme stocks themselves.

FCM stocks surged 82% on Wednesday, suspending multiple transactions as the Nasdaq exchange’s market capitalization temporarily rose to $ 71 billion.

Unfortunately, the rise was seen less than a week after Robin Hood was listed. Initial public offering.. According to traders and analysts, this week’s reversal reflects the acceptance of shares by retail investors on social media and the new availability of option contracts related to Robin Hood’s shares.

Robin Hood’s fee-free trading has attracted many retail investors who are willing to spare time and money during a pandemic. The California-based company traded so-called meme shares earlier this year as it organized to bid on shares such as theater chain AMC and video game retailer GameStop, which suffered customers on social media platforms such as Reddit. It was a central place to do.

However, the company also offended many clients in January, curbing the trading of some significantly missing stocks to meet the margin requirements from the clearinghouse.One day traders enjoyed the company Rocky debut Last week’s stock market fell 8.4% in one of the worst performances of its size levitation.

Recently, the momentum has gained with the purchase of shares by well-known investors such as: Cathie wood, Manages the investment fund Ark Invest.

Investor sentiment towards Robinhood shares has been brightening on social media sites such as Reddit since the IPO, according to Breakout Point, a personal investor sentiment tracker. Ticker mentions on Reddit surged Wednesday morning.

Breakout Point founder Ivan Kosovich said Reddit’s retail investors had begun to rally towards a stock price target of $ 35.15 to $ 60 on Friday, with “significant support for Kathy.” rice field.

“This was a very hated IPO in the retail industry, but it was bought by Kathy and some bystander retail investors decided to give it a try,” he added. “The rest is Fomo” or “Fear of overlooking”.

Data provider Vanda Research said on Tuesday that retailers began to make a big turn to stocks, raising stocks by 24% and surpassing the listing price for the first time.

Robinhood’s equity options trading also began Tuesday, according to Chris Murphy, co-head of the derivatives strategy of trading firm Susquehanna International Group. Derivatives that allow traders to speculate on potential stock movements have been particularly popular with retail investors in the last 18 months.

Dealers who sell bullish call options to investors usually buy Robinhood shares to hedge the risk of pushing the market upwards.

With Wednesday’s rise, Robin Hood’s market capitalization temporarily surpassed hundreds of top-tier companies, including car maker Ford, food company Kraft Heinz, and asset manager T. Rowe Price.

By 12:30 pm in New York, more than 101 million shares had been replaced. Shares had given up about half of their previous rise, but rose 33% to $ 62.19.

When asked if he thought Robin Hood would become a meme stock on the morning of the IPO, co-founder Vladimir Tenev said: Basically it’s a very good thing and we’re excited to be able to participate in it. “

Robin Hood soars after retailers flock to stocks

Source link Robin Hood soars after retailers flock to stocks

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