TD Ameritrade restricts some trading in Reddit-fueled stocks GameStop, AMC

Traders may start hitting a wall in their pursuits of red-hot, Redditor-fueled stocks.

Retail brokerage TD Ameritrade Inc. has put restrictions on some transactions involving a number of securities, including GameStop Corp. and AMC Entertainment Holdings Inc.

A spokesperson for the Charles Schwab Corp.-owned brokerage wrote in an email to S&P Global Market Intelligence that the restrictions were enacted in "the interest of mitigating risk for our company and clients."

"We made these decisions out of an abundance of caution amid unprecedented market conditions and other factors," said spokesperson Alyson Nikulicz.

GameStop and AMC have seen their stocks skyrocket more than 700% and 500%, respectively, in the last week alone, thanks to a retail trader-led bonanza caused by growing chatter on forums like Reddit's WallStreetBets and StockTwits that recently ensnared hedge fund Melvin Capital Management LP. The frenzy has not exclusively helped GameStop and AMC's stocks, either. Other brand-name securities such as BlackBerry Ltd., Build-A-Bear Workshop Inc. and BB Liquidating Inc., the surviving entity of bankrupt Blockbuster Video, have unexpectedly risen in recent days.

The surge of retail activity was believed to have contributed to widespread technical problems at many of the leading retail brokerages. TD Ameritrade, Schwab, Robinhood Markets Inc. and others were all suffering from reported outages in the morning of Jan. 27, according to Downdetector, which tracks user complaints in real time. Some TD Ameritrade clients faced slowness or difficulty accessing their accounts on the brokerage's app due to "unprecedented volumes" in the morning of Jan. 27, Nikulicz, the TD Ameritrade spokesperson, said in an email. The issue has since been resolved, Nikulicz said.

Reddit itself also saw an uptick in problems early in the afternoon on the same day, Downdetector reported.