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Reddit’s profane, greedy traders are shaking up the stock market

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Re: Reddit’s profane, greedy traders are shaking up the stock market

#241

Post by tybit »

thaumasiotes wrote: post #115
greenie_beans wrote: post #75

Earlier quoted context omitted.

Matt Levine has an interesting take in his email newsletter that refutes your claim. Basically, by so many people buying calls, it forces market movers to purchase the underlying stock to cover their call and this perpetuates an upward movement.

That's the opposite of what he said. Look at his latest article: > We have discussed this theory before, during Tesla’s wild rally, and I conceded that they’ve got a point. Not a perpetual motion machine, but a motion machine, sure. The machine runs on leverage. If you have $100, you can buy $100 worth of stock, and the stock will go up a little; your trade will be self-reinforcing. If you get a margin loan, you can…

Not a perpetual motion machine, but a motion machine, sure.

The GP was correct, Matt clearly says it can create some upward momentum, albeit not an unlimited amount.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#242

Post by simonebrunozzi »

safog wrote: post #23

Come on man, there's no where near enough volume there to move anything but the most low volume of stocks. All they trade in is meme stocks like TSLA, NFLX, MSFT, AAPL etc., and a few 100k on calls here or there won't budge the price in the slightest. On top of that, it's not even a P&D group, people there are just trading against each other, you have both bears and bulls and thetas. There's never been a concerted ef…

What's a "theta" ?

Re: Reddit’s profane, greedy traders are shaking up the stock market

#243

Post by sigstoat »

cdiamand wrote: post #34
Spellman wrote: post #31

Earlier quoted context omitted.

There's already a vehicle to invest on "buzz" actually. The BUZZ ETF is traded and invests based on how often particular stocks get mentioned in social media and new reporting. I'm sure they're monitoring r/WSB as well. http://buzzindexes.com/ Disclosure, do not hold or have any affiliation with Buzz Index products. Just heard about it before.

Cool! We were actually recently talking about how well an ETF that inversed WallstreetBets would do.

what's the inverse of WSB look like? holding for the long term? it's the only thing none of them are doing.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#244

Post by justlexi93 »

So subreddits are either echo chambers or hopelessly conflicted? I'm not defending WSB but isn't the entire point of internet forums / reddit discussion to argue about things? I absolutely hate any subreddit where only one train of thought is allowed and everything else downvoted.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#245

Post by lmm »

goldmanballsack wrote: post #168
hrdwdmrbl wrote: post #133

Earlier quoted context omitted.

I love finding comments like this where I understand very little. (I am not being sarcastic). Excellent for learning.

It's a bunch of mumbo jumbo from someone that takes the academic side of finance too seriously (LTCM anyone?). In plain English: Options are basically a contract, with a time limit, that states the holder can buy a certain amount of stock at a certain price. "Options dealers" are the people who wrote the contract and sold it to another party. They are on the "hook" for fulfilling the terms, if the buying party wishes…

> It's a bunch of mumbo jumbo from someone that takes the academic side of finance too seriously (LTCM anyone?).

Because they used standard, well-defined terms from that particular field? "Gamma" is further from mumbo-jumbo than 90% of computer programming vocabulary - it has a clear definition and everyone in the field understands exactly the same thing by it.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#246

Post by siculars »

simonebrunozzi wrote: post #242
safog wrote: post #23

Come on man, there's no where near enough volume there to move anything but the most low volume of stocks. All they trade in is meme stocks like TSLA, NFLX, MSFT, AAPL etc., and a few 100k on calls here or there won't budge the price in the slightest. On top of that, it's not even a P&D group, people there are just trading against each other, you have both bears and bulls and thetas. There's never been a concerted ef…

What's a "theta" ?

someone who plays the sideways game. aka premium burn. google options greeks theta.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#247

Post by lmm »

zelly wrote: post #219
mixedbit wrote: post #36

Earlier quoted context omitted.

Can they be bad at trading? https://xkcd.com/2270/

I wonder why this wouldn't work. If 90% of retail traders lose money, then why doesn't Etrade and Robinhood bet against its worst performing customers? Is there some law against this?

IIRC there was a scandal not so long ago with a forex broker that was just not executing trades from dumb clients, sitting on the other side of them itself instead. I don't know if it's exactly illegal in a direct way, but it's a bad look, and I think there was a fine in this case.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#248

Post by volkl48 »

mixedbit wrote: post #36
AnotherGoodName wrote: post #29

Earlier quoted context omitted.

I have a theory that WSB are so bad at trading that they actually do manipulate stocks due to messing up every automated trading platform that assumes there'd be some logic to the trades being made. Someone's just bought a $1000 call option on a stock that's currently $400? Automated trading systems will probably raise alerts on that stock since someone must know something for that to happen. This appeared to happen…

Can they be bad at trading? https://xkcd.com/2270/

This was actually addressed in one of Levine's columns last week (scroll to the second heading, titled "Efficiency")

https://www.bloomberg.com/amp/opinion/articles/2020-02-20/mo...

Worth a read. Short version is that a lot of the ways people lose money are hard to just do the inverse of.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#249

Post by titanomachy »

Majromax wrote: post #44
mixedbit wrote: post #36

Earlier quoted context omitted.

Can they be bad at trading? https://xkcd.com/2270/

While amusing as hell, the answer to the question posed by that XKCD is 'yes'. It's trivial to give away arbitrage opportunities, so the average expected loss – especially net of transaction fees – can be substantial.

That can't be done just by buying shares at market price, right? Would require some combination of options or short sells. Or setting stops on a highly volatile stock in a way that basically guarantees you lose money.

Re: Reddit’s profane, greedy traders are shaking up the stock market

#250

Post by Brendinooo »

Scoundreller wrote: post #225
Brendinooo wrote: post #43

Earlier quoted context omitted.

Firefox's containers make it easier to work around stuff like this.

Or TOR where NoScript is (should be?) the norm. Then they get less data to work with too. Win-win!

Some pages that check for private mode or whatever won't work without JavaScript.
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