Revolut stops trading $GME & $AMC stocks - statement

Here is a full statement from Revolut.

Revolut customers in Europe received this email around 4.54PM CET.

Trading Update for GME & AMC

Hi …,

From today, we will only be able to facilitate the selling of GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) stocks for the time being. Unfortunately, our broker-dealer in the US, DriveWealth, can no longer offer Buys on these stocks due to increased capital requirements set by the Depository Trust Company (DTC) in the US.

What does this mean for me?

You can only sell out your existing holdings in these stocks. Any outstanding buy orders on these two symbols made after Monday’s (1 February) close will automatically be cancelled prior to market open on February 2 2021.

None of our other stocks are affected at this time and are available to trade as normal.

For customers with no holdings in these 2 stocks, neither GME, nor AMC will appear when searched. This is a standard practice when a position moves to sell only, as we don’t want to show you stocks you’re not able to buy at that time. As soon as they become available to buy again, you’ll be able to see them in the app.

Why is this happening?

When a stock is traded, it takes two days for the proceeds to go from the broker to the clearing house. This is known as T+2 settlement. Within this time, the clearing house requires the broker to front cash or capital guarantees to ensure funds are available through the settlement process.

The required amount of capital is usually around 10-15% of the value of a security’s holdings on broker’s books. However, this percentage can vary based on stock volatility. In the case of GME and AMC, the DTC has enforced an increase of capital requirements by 250% upon DriveWealth’s clearing partners.

This increase means that DriveWealth is now obligated to restrict trading in GME and AMC, as each stock has its own capital requirement rather than a broker wide requirement.

When will they be available again to buy?

This is not a decision Revolut has made, simply one that we are obligated to carry out. We are monitoring the situation very closely and will update you when our partner, DriveWealth, re-enables Buys for GME and AMC. We apologise for any inconvenience caused.

Team Revolut

Capital at Risk

The value of a stock may fall as well as rise and you may get back less than what you initially paid, and in some cases the stock may lose its entire value and you may lose your initial investment. This is not investment advice. It is strongly recommended that you seek professional investment advice before making any investment decision.

Disclaimer: Revolut Trading Ltd. is an appointed representative of Resolution Compliance Ltd which is authorised and regulated by the Financial Conduct Authority (FRN:574048).

Revolut is one of the most popular investing apps in Europe. Maybe it is not that well-known in US yet.

But, until recently, it was one of possible alternatives to Robinhood to buy $GME and $AMC stocks.

What are alternatives to Revolut in Europe – to buy $GME and $AMC stocks?

According to Invezz, you can still buy these stocks in:

  • Saxo
  • BlackBull markets
  • AvaTrade