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Wall Street Opens Higher as Brokers Squeeze the Squeezers; Dow up 250 Pts

Stock MarketsJan 28, 2021 09:39AM ET
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By Geoffrey Smith 

Investing.com -- The battle between retail traders and Wall Street hedge funds swung back in favor of the latter at the opening of trade on Wednesday, as various online brokerages made it harder to buy the heavily-shorted stocks that have been squeezed hardest in recent sessions.

Interactive Brokers (NASDAQ:IBKR) said it would raise its margin requirements to 100% of long exposures and 300% for short exposures until further notice. It also put options trading in AMC Entertainment (NYSE:AMC), BlackBerry (NYSE:BB), Express (NYSE:EXPR), GameStop (NYSE:GME) and Koss Corporation (NASDAQ:KOSS) into liquidation, citing “the extraordinary volatility in the markets.”

Meanwhile, Robinhood – the brokerage where much of the gung-ho attack on short-sellers has been concentrated, said it will stop its clients buying all of the above stocks, as well as Naked Brand Group (NASDAQ:NAKD) and Nokia (NYSE:NOK).

Such moves eased the pressure on hedge funds to liquidate other positions to cover their shorts. By 9:35 AM ET (1435 GMT), the Dow Jones Industrial Average was up 253 points, or 0.8% at 30,557 points. The S&P 500 was up 0.8% and the Nasdaq Composite was up 0.6%.

GameStop (NYSE:GME) stock was again the most active stock in early trading, despite the limitations. It rose as much as 35% before retracing to be up a mere 23%. It's still up nine-fold from its levels of a week ago, and Thursday's spike briefly made it the biggest stock in the Russell 2000 (NYSE:IWM) midcaps index. Other names still being squeezed included American Airlines (NASDAQ:AAL) stock, which rose 14% after it reported it swung to a loss of $2.18 billion in the fourth quarter and said it was still burning $30 million a day. 

Elsewhere, Tesla (NASDAQ:TSLA) stock slipped 5.4% after it reported its first-ever full year of profit, with some disappointed by the forecast for this year's growth in deliveries. Apple (NASDAQ:AAPL) stock also fell amid some disappointment with its outlook for the coming year, but pared overnight losses to be down only 1.3%.

There was little evident reaction to the - widely expected - news that the U.S. economy slowed sharply in the fourth quarter, gross domestic product expanding at an annualized rate of only 4%, from a rate of over 33% in the previous three months. The pandemic-driven clampdown on services activity in particular in recent months was also visible in the latest initial jobless claims numbers, which stayed high at 847,000 - although that was clearly down from the previous week's 914,000.  

 

Wall Street Opens Higher as Brokers Squeeze the Squeezers; Dow up 250 Pts
 

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Comments (44)
Neta Goldberg
Neta Goldberg Jan 28, 2021 3:29PM ET
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Where is Sec? Where is biden? This is not freedom, not free market. Supreme Court pls act against robinhood app founders!They should go to the prison?
Steve Hauser
Steve Hauser Jan 28, 2021 1:34PM ET
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who helps the little investor when they lose? nobody. Big guys always feel they need to be bailed out. This is the whole problem.
Zhehui Liu
Zhehui Liu Jan 28, 2021 1:34PM ET
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small investors have to work together to fight back
Jay Dean
Jay Dean Jan 28, 2021 12:15PM ET
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they blocked the retail traders from buying aka the little guy from buying on apps like robinhood and others etc.... actually illegal and one sided if you ask me . free equal trading for everyone ???? I think not, I'm glad the redditors did this, now it is on full display how corrupt the stock market is which we all knew it's just on full display.JOKE STOCK MARKET MANIPULATED .
Ron Raymond
Ron Raymond Jan 28, 2021 12:15PM ET
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More corrupt than most will ever know. I am a trder that has learned that tthe hard way. Unbelievable what the big money pulls and what they think and do get away with. Few know Powell is one of them.
Ell Skware
Ell Skware Jan 28, 2021 11:59AM ET
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Here's why the markets suddenly turned green again- the institutions will find it hard to defend screwing the option traders ( mostly millennials on the apps) as well as the buy and hold generation. Taken together that is just about everyone outside of institutions & hedge funds. If they **** everyone too fast then people are going to do something about it. Ultimately they need us. And what we need is a platform where its just us not the shillies and the fake analyst raters from Goldman Sachs etc., who get you to invest in what they need you to. Educate yourself but also the playing field has to be even. Thanks to Wall St Bets for challenging the fabric of a corrupt and illegal system.
Agustí Pont
Agustí Pont Jan 28, 2021 11:41AM ET
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state terrorism against small savers
David JC
David JC Jan 28, 2021 11:39AM ET
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So...basically the hedge funds got a taste of their own medicine and quickly figured out how to manipulate the market in their favor again.
Cornel Pod
Cornel Pod Jan 28, 2021 11:37AM ET
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Complicated explanation for the market. How about way overbought and a pullback that is underway (don't get against the Fed..!)?
Ell Skware
Ell Skware Jan 28, 2021 11:37AM ET
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there was no catalyst and a total absence of news. One banker explained it as "a healthy correction" point is healthy for whom?? you can get obese on that ****
Jin News
Jin News Jan 28, 2021 11:28AM ET
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Bulls are back in town! Bears are taking cover
Making Deals
makingdeals Jan 28, 2021 11:05AM ET
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File your SEC complaints here: https://www.sec.gov/tcr
Ell Skware
Ell Skware Jan 28, 2021 11:02AM ET
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Brokers are NOT squeezing anyone- they have the help of the fed. Apparently you have disabled the buy for most retail trading apps. No ones getting squeezed they are making the playing field even more uneven than it is because they dont know how else to win!
Rushikesh Rithe Rushikesh Rithe
Rushikesh Rithe Rushikesh Rithe Jan 28, 2021 11:01AM ET
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Hahah crazy crazy market not sure if to continue with any trade
Jay Dean
Jay Dean Jan 28, 2021 11:01AM ET
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Rigged MARKET
Girish RS
Girish RS Jan 28, 2021 11:01AM ET
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Well looks like we average traders have to *******it up and can’t do anything now ... saddening....
Frank Stanek
CuriousMind Jan 28, 2021 10:52AM ET
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You'll notice that the firms will never react negatively when the rich game the system, but when the average Joe attempts it? WHOA THERE, THAT'S NOT OKAY!!!
Monkey Singh
Monkey Singh Jan 28, 2021 10:52AM ET
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The WSB guys can apply for the necessary approvals and then open your own brokerage firm that won't handcuff the average Joes in favour of the hedge funds.
Trader Man
Trader Man Jan 28, 2021 10:50AM ET
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these hedge funds don't know what they are playing with. they will soon regret.
Michael Song
Michael Song Jan 28, 2021 10:46AM ET
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rigged market..jail all Wall Street and create a fair system
Shane Gg
Shane Gg Jan 28, 2021 10:45AM ET
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Publicly traded companies raise capital by higher share prices sometimes, if they stay below $1 too long, they get de-listed. Essentially, the law is being broken to save hedge funds, regardless of the companies losses, regardless of the fact that big media can have hedge fund managers on tv and in print telling people what to buy, but other people aren't allowed to collectively tell what to buy on a social media site. I played no role in the Reddit Wall Streets Bets and had never heard of it until yesterday, but today I have assets in closing position only because apparently only Wall Streets' ability to make money is allowed. Hedge funds are making by shorting stocks and driving prices down, for some reason that's just fine and dandy. But bring a stock price up and you're cut out of trading period. This is an absolute joke and people need to be held accountable. These companies should file suit.
Ell Skware
Ell Skware Jan 28, 2021 10:45AM ET
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When the fat cats were stuffing their faces with profits that were not theirs to take there was hardly any of the usual "BS news narrative" - why not? because there isn't much any one can cover that muck up with. There was no catalyst for the fall- the greedy ******* saw the stock market thriving and thought lets take it all and leave the rest of them some scraps. I haven't been hurt financially by this but it is so blatant and shameless without any effort to hide.  Love what's going on at wall st bets. Part of the revolution- we all don't play the game for a week- see how they do then- they need us for this to work.
Shane Gg
Shane Gg Jan 28, 2021 10:45AM ET
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Ell Skware  I didn't lose out at all. I had sold my GME way before the WSB deal. Wish I hadn't haha.... I sold mine way back for only $4.88 a share. But yes, it's absurd that when big billion dollar hedge funds lose money, the media and exchanges bolt into action to save them but when little people lose money it's, "oh well, that's the way the ball rolls."
Christopher Jordan
Christopher Jordan Jan 28, 2021 10:44AM ET
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"Squeeze the squeezers" - Isn't that a great way to spell market manipulation when it isn't going in your favor.
Mke Gee
Mke Gee Jan 28, 2021 10:44AM ET
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They manipulated!!! Guess ill hold and buy more wherever its traded! Lol
Todd Miller
DoubleDuece Jan 28, 2021 10:43AM ET
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Very obvious market manipulation by the brokers not allowing people to buy these stocks.
HD HD
HD HD Jan 28, 2021 10:43AM ET
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Bunch of CROOOKS!
Gerardo Blanco Tatis
Gerardo Blanco Tatis Jan 28, 2021 10:38AM ET
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aw hedge fund kids don't enjoy the free market?
Gerardo Blanco Tatis
Gerardo Blanco Tatis Jan 28, 2021 10:38AM ET
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aw hedge fund kids don't enjoy the free market?
Vincenzo Dellboy
Vincenzo Dellboy Jan 28, 2021 10:34AM ET
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OPEC get away with it too, manipulating prices. If the banks did the same they’d get crucified
Vincenzo Dellboy
Vincenzo Dellboy Jan 28, 2021 10:30AM ET
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Old boys club looking after the hedge funds- stuff them
Patrick Monteith
Patrick Monteith Jan 28, 2021 10:26AM ET
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blocking ability to buy companies to save the hedge funds ? that sounds illegal to me.
First Last
HonestComment Jan 28, 2021 10:26AM ET
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That is exactly what should be investigated not random degenerate boards.
 
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