ASX chief warns on GameStop-style trading frenzy

However, he pointed to several factors that make a GameStop short squeeze – in which online traders last month used the online forum Reddit to trigger a surge in the price of the heavily-shorted stock – less likely in Australia.

For one, he said the business model used by Robinhood, the no-commission broker used by many of the day traders, could not operate here. “The zero cost trading from Robinhood, that’s because Robinhood’s revenue model is to sell your order to a market maker. You can’t do that in Australia,” Mr Stevens said.

While more than 100 per cent of GameStop’s shares were sold “short,” meaning traders were betting the stock price would fall, Mr Stevens said…