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Robinhood halts trading on GameStop amid market volatility: what this means

In the past week, GameStop's stock has been incredibly volatile, with the stock's price ballooning to nearly 10 times experts' valuation.

MENLO PARK, Calif. — In the past week, the stock market has been going wild, mostly due to a Reddit forum entitled "r/WallStreetBets."

Reddit stock traders - retail investors - are learning about the stock market in a very public way, and they're using investing apps like Robinhood that make trading easier and faster for those just breaking into the stock market.

In the past week, GameStop's stock jumped to 10 times experts' valuation, according to CNBC's Andrew Ross Sorkin, who spoke about what's happening on The News With Shepard Smith on Jan. 27.

That ballooning could lead to a bubble. Bubbles aren't good because when a stock is driven above their considered value, eventually it will burst. This fast inflation followed quickly by a decrease in value, or a contraction, can cause a crash meaning people lose money. 

As a result of this volatility, Robinhood released a statement on Jan. 28 announcing that they are "restricting transactions for certain securities to position closing only," meaning, they're halting trading. They're also halting trading of AMC, Express, Bed, Bath & Beyond shares, plus others.

The trading app also raised margin requirements for certain securities, meaning fewer people can buy more stocks than they can afford to.

"We’re committed to helping our customers navigate this uncertainty," the release said. "We fundamentally believe that everyone should have access to financial markets. We’re humbled to have helped many people invest in the markets for the first time."

What this means for those who are already invested, remains to be seen.

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