London-based broker Trading 212 has announced it has placed Silver on close-only mode and any buy position on the precious metal has been suspended indefinitely.
The decision by the FCA-regulated firm is coming following the high increase in the price of Silver, as it hit an 8-year high on Monday.
The WallStreetBets traders seem to be the reason for the firm’s decision. The group is now shifting focus on Silver after causing hedge funds to lose massively from stocks like GameStop.
The Reddit group called for massive betting on Silver to go against institutional investors who have placed trades against the precious metal.
Silver hits 8th-year high
Silver saw a 13.5% rise in its price on Monday, after rallying at 6% last week. BlackRock provided data from the biggest silver-backed exchange-traded fund iShares Silver, showing about $1 billion inflows on Friday. In other words, the number of shares in the iShares Silver Trust increased by 37.05 million, which is the largest increase on a single day since the Trust began trading in 2016.
Reddit’s WallStreetBets group recently opened a subreddit discussion tagged; ‘The biggest short squeeze in the world $SLV Silver $25 to 1000$.’
The discussion has been driving unusually high activity for Silver trades on Trading 212, which prompted the broker’s decision to close Silver “BUY” orders on its platform.
Trading 212 also stopped the on-boarding of new users, after a large number of Redditors tried to buy AMC, Nokia, Blackberry, and GameStop stocks.
Trading 212 released a statement on its website to inform users about its decision.
“Silver has been placed in close-only mode, meaning that new Buy positions can’t be opened but existing ones can be closed,” the broker stated.
The Winklevoss twins in support of the trend
It’s not clear when Trading 212 will reopen the BUY position, or which action will be taken to further prevent unusual market activities.
The Winklevoss twins have shown their support to the now trending #silversqueeze hashtag on Twitter. Cameron Winklevoss tweeted that the gold market will be the next if the Silver market has shown to be fraudulent.
But some investors are not in support of the recent happenings, with Senator Elizabeth Warren calling for an investigation into the recent event. She told CNN that there’s no clear evidence to know all the major players in the saga. She added that there could be institutional investors from both sides pushing the market to this bizarre point.