Robinhood Has Told Users It May Close Some ‘At-Risk’ Positions

Robinhood Markets told users of its popular stock trading app that it may close out some of their positions as part of measures it’s taking to reduce account risks.

“Unprecedented volatility” surrounding shares of GameStop Corp. and AMC Entertainment Holdings Inc. and increased risks related to their trading prompted Robinhood to make the move, a spokesperson for the brokerage said.

The company informed customers Wednesday with GameStop and AMC options expiring Jan. 29 that those options would be set to closing transactions only.

“Additionally, we let them know that if we determine that an option contract is at risk of being in the money and a customer doesn’t maintain the necessary collateral to support assignment/exercise, we may take proactive measures to help reduce account risk, including closing at-risk positions prior to expiration date,” the spokesperson said.

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