U.S. retail brokerages falter in early trading: Downdetector

(Reuters) – Users of several major retail trading platforms, including those of Charles Schwab Corp and Robinhood, reported operational problems early in the market session on Monday, according to outage monitoring website Downdetector.com.

Customers of Merrill Lynch, Vanguard and E*Trade, which is owned by Morgan Stanley, also reported issues, which ranged from difficulties in logging in, to the buying and selling of shares, according to Downdetector.

Robinhood said on its website it was having issues with crypto-trading and that it was working to resolve them.

Representatives for Robinhood, Schwab, Merrill Lynch, Vanguard and E*Trade were not immediately available for comment.

The problems were the latest in a string of technical problems among retail brokerages, which have faced a massive surge in volumes over the past year after most platforms cut commissions to zero and as stocks rallied following a sharp decline at the beginning of the COVID-19 pandemic.

It was not immediately clear what caused the outages on Monday, but they came as shares of U.S. videogame retailer GameStop Corp surged as much as 144%, touching another record high after having already gained about 451% since the beginning of the year.

Traders believe one reason for the jump in the shares is short-sellers quickly buying back into the stock to cover potential losses, defined as a short-squeeze, and retail investors piling in to benefit from the surge.

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