By Anna Irrera
LONDON (Reuters) – Commission-free trading app Freetrade said on Friday it had disabled buy orders for U.S. stocks amid a market frenzy that has seen shares of heavily shorted stocks like GameStop surge this week after being pushed on social media platforms.
The London-based startup said in a statement that the move was due to an unexpected decision from its foreign exchange provider and the provider’s bank to limit its trade volumes.
The company will allow users to sell U.S. stocks to exit existing positions, the statement said.
“We received no warning of what we consider an extremely poor decision,” it said. “We are deeply unhappy with this decision and we are doing everything possible to rectify the situation.”
The company is the latest trading platform to report disruptions to its service, following a surge in volumes stemming from calls on social media to trade stocks like GameStop and AMC that were being heavily shorted by hedge funds.
Platforms including U.S.-based Robinhood halted purchases of the most volatile stocks, raising the ire of customers.
Launched in 2018, Freetrade has seen new users surge over the past week, with daily customer sign-ups jumping from 30,000 to 3,000 a day on Thursday, according to a spokesman.
It has also been processing record trading volume amounts, it said, far exceeding “vaccine day” in November, it said.
(Reporting by Anna Irrera; Editing by Rachel Armstrong and Jan Harvey)
