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High Trading Volume in GameStop, AMC Blamed as Platforms Crash

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Brokers and investors again complained of widespread service disruptions Wednesday morning when attempting to make trades using the online and mobile trading platforms of Charles Schwab, Fidelity, Merrill Lynch, Morgan Stanley’s E-Trade, Robinhood, TD Ameritrade’s thinkorswim and Vanguard.

The problems were largely chalked up to extremely high trading volumes for heavily shorted stocks including the retailer GameStop and others promoted by a group on Reddit’s WallStreetBets board.

Trading also became heavy for AMC Entertainment on Wednesday, two days after the struggling company (which was forced to close theaters amid the pandemic) reported it “successfully raised or signed commitment letters to receive $917 million of new equity and debt capital [that] should allow the company to make it through this dark coronavirus-impacted winter.”

Robinhood, meanwhile, was experiencing an intermittent disruption with its Robinhood Crypto trading service on Wednesday morning. It initially reported a “major outage” with the crypto service that was later downgraded to a “partial outage.”

The problems came just two days after similar issues were reported on the trading platforms.

Over the past week, a wave of trading fueled by WallStreetBets helped push up the stock of GameStop — which spilled over to  other stocks heavily shorted by hedge funds like AMC and phonemaker BlackBerry.

The volume of GameStop shares, for instance, surged to over 177 million on Monday and Tuesday, dropping to a still-high 91 million on Wednesday. Meanwhile, its stock has risen about 350% from late Friday, when it traded at about $65 per share, to $292 per share in after-hours trading Wednesday.

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Downdetector reported issues with the trading platforms starting at 8:37 a.m. Eastern time with Robinhood. Robinhood responded to various tweets complaining about service issues, telling investors to contact the firm directly about their issues.

Reports on Downdetector about the other trading platforms soon followed, up through Merrill at 9:57 a.m. There were many complaints about thinkorswim, including one investor who said: “The App is garbage today on one of the best days to trade. That’s ridiculous!”

There were a similar number of complaints on Downdetector about Schwab’s platform, including one investor who said: “Have not been able to place an order on Schwab since opening bell and it is now 11 AM. Every time the market get busy I have issues.”

It was pretty much the same story with E-Trade, with comments including: “Locked out of E-trade during selloff.” It was the same story with Vanguard, with comments including: “on hold now 44 min thus far, no web access to trading. And the same with Fidelity, with comments including: “Can’t process any order !!! Whats going on ??”

Similar complaints were widely made on Twitter Wednesday morning about the various trading platforms. They included: “@thinkorswim mobile app is incredibly slow. Prices take forever to load up. Alerts are not working. Takes forever to just open the app. What’s wrong”

Meanwhile, tweets about Schwab’s platform included: “So @CharlesSchwab you’re just not going to address the fact that we can’t trade on your platform right?? At minimum I’d expect you to come out with a Tweet saying something about the fact you’ve screwed millions of people over today…thanks”

Schwab tweeted at 12:44 p.m.: “Access has been restored to our platforms. It may help to log out and log back into your account. We apologize for the inconvenience and please let us know if you are still experiencing issues.”

Responding to ThinkAdvisor’s query, a Schwab spokeswoman said at 11:30 a.m.: “In the midst of heightened trading across the market today, some Schwab clients experienced issues with trading and other online functionality which has now been resolved. We will work with all clients to ensure their situations are made right.  We apologize for any inconvenience our clients experienced this morning.”

Thinkorswim tweeted it was working to resolve the issues. A TD Ameritrade spokeswoman said at 11:25 a.m.: “Clients are able to access their accounts and trades are being processed as usual across all TD Ameritrade platforms.

“Earlier this morning, some of our clients experienced slowness or difficulty accessing their accounts on our TD Ameritrade mobile platform due to unprecedented volumes. During this time, clients could access their accounts and place trades through all other TD Ameritrade platforms, including the TD Ameritrade web platform and thinkorswim web, desktop, and mobile. This issue has been resolved,” according to a statement.

Later in the day, the TD Ameritrade spokeswoman said her company “placed restrictions on some transactions” in GameStop and other unspecified securities.

“Restrictions, which differ from security to security and are subject to change, may include actions like increasing margin requirements, or limiting certain types of transactions, like short sales and those that may involve unlimited risk,” she said. “It is not uncommon for us to make such decisions, which we consider on an individual basis, in the interest of mitigating risk.”

TD Ameritrade has been “adjusting our requirements for several days as we continued to see trends indicating unusual volume in an unprecedented market environment, which appear to be divorced from traditional market fundamentals,” she added. “We have made what we believe to be prudent and appropriate decisions to place some limits on certain transactions for certain securities.”

Regarding the issues with Fidelity, a company spokeswoman said at 11:12 a.m.: “We are aware that some clients have experienced technical issues this morning. This has been resolved and we apologize for the inconvenience.”

E-Trade, Merrill and Vanguard did not immediately respond to requests for comment on Wednesday.


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