29 January 2021
Amateur investors were shocked when stock trading platform Robin Hood prevented them from buying shares in the US games firm, GameStop, and other companies. The move has raised questions about the app which it has sought to answer through its own blog and the media.
Adam Leon Smith, Chair of the Software Testing Group at BCS, The Chartered Institute for IT commented: “Reddit users realised that hedge funds were buying short options in GameStop stock, pushing down the price. When people on the internet started buying the undervalued stock, the hedge funds lost billions.
“Many of these internet users are using Robin Hood, an amateur trading app offering commission free trading. Robin Hood responded by blocking users from buying the stock, pushing the price back down.
“This raises lots of questions about the app. As regulators investigate this may be revealed to be the latest example of how if the product is free, the user is the product.”