Users wishing to open an account with the London-based IG Group broker cannot do so, for the company has suspended the creation of new accounts. Currently, the main reason for this is the array of technical issues that the broker is facing caused by the recent redit-GameStop predicament.
A short squeeze, meaning a sudden increase in a stock’s price due to technical factors, caused by the infamous redit group WallStreetBets has dried many hedge funds. These same hedge funds held short positions on GameStop and AMC stocks, as well as others. The pricing of the stocks increased exponentially. What followed was a wave of investors trying to squeeze in some profit from all the chaos.
June Felix, CEO of IG Group, in an open letter to his firm’s clients, stated that “We are in the midst of an unfolding situation in global markets which is attracting a significant number of new traders to trading platforms to buy particular stocks in a coordinated way…This has caused a significant increase in trading volumes and demands on our platform.”
The CEO assured users that all future issues, similar to this one, will be dealt with in a more subtle way. Feliz claims that they have halted new account creations, for now, because IG is currently focused on their existing customers.
IG has suspended all trading with Gamestop stocks, as well as other volatile stocks. For now, it seems that IG, and others, are not planning to lift the suspension, however, their press release concerning the matter states that IG is working hard on putting things back like they were before the redit-GameStop outrage.