• Robinhood on Friday withdrew trading limits on two of the most popular stocks among Reddit traders.
  • On Tuesday, the trading app had relaxed buying and selling restrictions on GameStop and AMC.
  • Earlier this week, Robinhood secured $3.4 billion in capital, its largest fundraising since launching in 2013.
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Robinhood removed trading restrictions on Reddit-trader favorites GameStop and AMC Entertainment, according to an update on Friday on the trading platform's website.

The move came only days after Robinhood rolled back restrictions on purchases of both stocks, when traders could buy up to 100 shares of video-game retailer GameStop and 1,250 of movie theater chain AMC. Previously, the limit was set at 20 shares for GameStop and 350 for AMC.

Trading volumes in both stocks have dropped this week, after massive price rallies fueled by retail investors, who took on Wall Street heavyweights that had bet against those shares, forcing them to unwind those positions, even at a loss.

Robinhood's decision to impose limits on trading was met with heavy scrutiny from investors and lawmakers. But the company explained it had to block purchases in some stocks to meet a 10-fold increase in deposit requirements mandated by SEC-registered clearinghouses.

"It was not because we wanted to stop people from buying these stocks," Robinhood wrote. "We did this because the required amount we had to deposit with the clearinghouse was so large with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements that we had to take steps to limit buying."

On Monday, the company said it raised $3.4 billion in new funding only days after receiving $1 billion from investors. That marks Robinhood's largest fundraising since its inception in 2013.

GameStop was up around 20% and AMC rose 11% in pre-market trading Friday.

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