Broker News

Robinhood Dominates Meme Stock Trading: $5B Daily Volume

Robinhood has again become central in another meme stock surge. CEO Vlad Tenev shared that Tuesday was one of the year’s busiest days, with $5 billion in daily trades. Robinhood’s monthly equities trading volume in April stood at $70.7 billion, a 17% drop from March’s $87.7 billion. Notably, April 2023 saw a much lower volume of $38.9 billion in equities trading.

Tenev announced that Robinhood plans to enhance its infrastructure to handle even larger volumes.

GameStop’s Remarkable Rally

This week’s surge in trading was driven by retail investors flocking to GameStop shares. GameStop’s stock price soared by 74% on Monday and rose an additional 60% on Tuesday. However, the company’s shares fell by 30% during Wednesday’s intraday trading.

In 2021, retail interest in GameStop led to a massive meme stock phenomenon, causing a short squeeze that hit major hedge funds hard. Retail traders, particularly from the WallStreetBets subreddit, coordinated their moves, leading to substantial losses for hedge funds.

The previous surge followed a detailed analysis by retail investors, notably Keith Gill, known as TheRoaringKitty. Gill and others identified value in the heavily shorted stock. This time, the rally stems from Gill’s cryptic social media post on Sunday.

Brokers Capitalize on Meme Stocks

In addition to Robinhood, other brokers experienced increased meme stock trading. Interactive Brokers reported GameStop as the third-most traded stock on Tuesday, after Nvidia and Tesla. Public, another retail broker, also observed a spike in meme stock trades like GameStop and AMC, though Nvidia and U.S. Treasurys remained top assets on Wednesday.

A Public spokesperson mentioned that trading volumes for GME and AMC soared by 300% week-over-week. Moomoo, an online trading platform, confirmed higher trading volumes in meme stocks but didn’t provide specific numbers.

Meanwhile, eToro, preparing for a public listing, temporarily halted trading for GameStop and AMC. eToro explained that significant stock volatility triggers safety mechanisms, temporarily halting trading to ensure accurate pricing. While exchanges may implement these halts, eToro also follows such measures and may sometimes decide to pause prices.

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