Reddit Trading Frenzy Fades as Yellen Summons Agencies

A social media-driven trading cooled on Wednesday as U.S. Treasury Secretary Janet Yellen called a meeting of top officials that could result in tougher markets regulation for hedge funds, small investors and stockbrokers. From a report: Mass buying by amateur traders over the past two weeks has driven wild price gyrations in companies that big U.S. fund managers had bet against, including videogame retailer GameStop and cinema operator AMC Entertainment. GameStop's U.S.-listed shares, which scaled as high as $483 last week, fuelled by posts on the popular Reddit forum WallStreetBets, deflated this week to $90 as fee-free broker apps including Robinhood imposed buying curbs. They erased early declines to rise 11% in pre-market trading on Wednesday, while shares of AMC gained 7.8%. GameStop"s Frankfurt-listed shares continued their pace of declines, falling 24% by 1030 GMT. Silver, which briefly surged on Monday as small traders bought up the metal, steadied about 10% below its recent peak. "The unwind is obvious," said Oriano Lizza, premium sales trader at brokerage CMC Markets in Singapore. But he added that it would be easy for nimble small investors to regroup and target fresh companies. "I think from a regulatory standpoint, the concern is that they could continue to do this," he said.

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