Understanding Trading Suspensions

UPDATE: 03.02 U.S. stocks GME, AMC and NOK are currently able to be traded on Stake.

We have just received notification, our broker-dealer in the US, DriveWealth, will not be able to offer Buys on GameStop ($GME), AMC Entertainment ($AMC) and Nokia ($NOK) due to increased capital requirements set by the DTC.

Any buy orders on any of these symbols made after Monday’s close will automatically be cancelled prior to market open Tuesday.

To be clear, this is not a decision Stake has made. As DriveWealth is our broker-dealer, we can only reflect the securities they make available. As such, we are unable to confirm when this may change.

If you’d like to understand more about the DTC and capital requirements, we’ve provided more information below.

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.

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 guarantee 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 the above symbols, the DTC has enforced an increase of 250% upon DriveWealth’s clearing partners.