This change could help keep the GameStop fiasco from happening again
Part of what made last month’s GameStop trading frenzy such a mess: Right as the stock was hitting its peak, Robinhood and other brokerages placed restrictions on traders’ ability to buy it (and other surging “meme” stocks like AMC).
Many said the episode demonstrated that individual retail investors are at a disadvantage compared to hedge funds and other large Wall Street institutions.
Now, clearing firm The Depository Trust and Clearing Corporation (DTCC) — which provides, basically, underlying infrastructure for equities markets — has proposed shortening the settlement cycle for stock trades, which would reduce the likelihood of brokerages having to restrict trading during future periods of volatility.