The trading war between the Wall Street pros and amateur traders is far from over. In fact, many analysts believe that events happening in the UK and US will escalate the war if they go unchecked. Emergency platforms that give small traders a chance to buy and sell stocks have redefined the battleground and are giving the amateur traders tools to fight the Wall Street pros.
As a result of the war, some leading financial trading platforms have suspended trading AMC and GameStop shares. Initially, the two companies saw their share prices rise thanks to the amateur investors who shared details on what the Wall Street pros were up to on social media and shared information on how to open a Metatrader 4 account. It helped the small traders to take on Wall Street pros.
As a result, GameStop saw its shares increase by 700% in one week, while Companies like Blackberry and AMC experienced an increase in trading activities, which increased their shares’ value.
Investors lashed at the trading platforms for imposing restrictions, arguing that they were doing so to advantage the traditional Wall Street cartels who seem to be losing out as more platforms allow small investors to partake in the trades.
In response, one of the brokers that had suspended transactions on GameStop and AMC entertainment shares said that its actions were intended to bring to an end the extreme volatility in the market. It said that it would not allow investors to open new trades on AMC Entertainment and GameStop shares. Further, it said that the restrictions would be reviewed regularly and that traders were free to close open positions in the company’s stock. The company further said that investors that had already placed trades on the company’s stock would remain open until the owners choose to close them.
So what may happen to GameStop shares?
Investment firms, including hedge funds, had predicted that GameStop, which sells consoles, games, and other electronics, would see the value of their shares plummet. As a result, they engaged in short selling where they borrowed shares in GameStore, sold them, and promised to repurchase them later. This action is popularly referred to as “shorting’’. It was meant to help them make quick money when the price of shares decline. Unfortunately, a huge number of independent amateurs, who are majorly young people, shared the tips on social media, and they instead bought GameStop shares to counter the strategy. Records show that some of them shared information on opening an account on MT4 trader, which they eventually used to buy the shares.
The procedure of opening ametaTrader account
Some of the steps they shared to help them in opening a Metatrader account include:
- Choosing Metatrader 4 as your broker
- Downloading the platform
- Creating an account on the platform
- Logging into the MetaTrader 4 platform
- Clicking on MetaTrader supreme edition
- Uploading funds to the account on the platform
These actions increased the demand for GameStop share prices, which made Wall Street traders suffer massive losses. The same idea was replicated in the shares of AMC Entertainment, which is also believed to be struggling.
As a result, watchdogs in the UK and US have warned traders that they were likely to face massive losses. So they would continue to monitor the activities with a plan to bring any lawbreakers to book. Already, the United Kingdom’s Financial Conduct Authority has released a statement saying that they were aware of what was happening and were closely monitoring activities in the UK market. They warned traders to take utmost care when trading since the highly volatile market could expose them to many financial risks
Interestingly, most of the young people who took on the Wall Street barons were working from home. Some of them had been made redundant due to the impact of the pandemic. These young people continued to receive stimulus checks, which they decided to use to trade stock on all platforms such as Metatrader4 and Robinhood. The young investors learned from the Reddit chat board that Wall Street was shorting GameStop, which apparently is their popular video game outlet; they campaigned against the move and swung into action to rescue GameStop.