The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone arranged in Hastings-On-Hudson, New York, USA, on Friday, January 29, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
GameStop stocks were volatile in pre-market trading on Monday, as the frenetic trading fueled by Reddit continues.
Shares of the physical video game retailer soared a whopping 18% to $ 384.89 in premarket trading. The stock was last up about 2% to $ 333. The stock was up 1,625% in January.
The astronomical rally has caused a mark-to-market loss of nearly $ 20 billion to hedge funds with short positions against the stocks, according to data from S3 Partners. However, many short sellers are holding on to their bearish positions.
Robinhood and other trading apps continue to restrict the buying of GameStop stock and options contracts, along with those of other heavily abbreviated names, after a week of wildly volatile trading driven by a retail trading frenzy led by 5 million strong Reddit thread “WallStreetBets. “
Limitations also apply to AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group.
Short selling is a strategy where investors borrow shares of a stock at a specified price in the expectation that its market value will fall below that level when it comes time to pay for the borrowed shares.
– CNBC’s Yun Li contributed to this report.