Earlier quoted context omitted.
It's fine, for all intensive purposes. (This is what happens when a society stops reading books.)
Common guys, getting the phrasing right is not rocket appliances.
Reddit’s profane, greedy traders are shaking up the stock market
251–260 of 364 posts
Re: Reddit’s profane, greedy traders are shaking up the stock market
#252Earlier quoted context omitted.
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.
Given buy/sell spreads, you can lose arbitrary amounts of money simply by buying and selling the same stock hundreds of times.
Re: Reddit’s profane, greedy traders are shaking up the stock market
#253Earlier 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…
Some of this can also be a totally legitimate result of putting dealers short gamma. When options dealers are short contracts, their delta hedging activity (ie, their effort to reduce first-order risk to the share price by buying or selling a commensurate amount of stock) contributes to the momentum of a large move, because dealers' hedges chase the stock. If this explanation is unsatisfactory, look up "short gamma"…
Yeah but I mean if you need to hedge fucking 5 delta deeeeep otm options, you don't need that much stock buying to get your book theoretically delta neutral. I know short gamma markets are a real occurrence on the dealer end, but that happens from institutional money. No one retail is going to be able to move this stuff (unless it's Warren buffett going in big on derivatives for some funny reason).
Re: Reddit’s profane, greedy traders are shaking up the stock market
#254Earlier 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…
There is no way Wall Street is using trades by retail traders as a signal (except maybe to counter-trade them). Also btw Wall Street can easily differentiate trades made by big players versus hordes of retail traders, because the banks and HFT firms are who executes the trades from retail brokerages. Retail brokerages like Robinhood don't have the authority to execute trades. They subcontract to a HFT firm who then u…
You contradicted your sentences. I do know Robinhood gives zero commission trades by selling order flow data to hft and market making hedge funds but I don't think those funds execute the orders themselves. The orders still go to brokerages I think (may be wrong about this) or just hit Prime Services from non hft hedge fund books.
Either way, those hft firms definitely like retail order flow data. My guess is they're easier to "pick nickels in front of steamroller" kinda trades than institutional money which may cause extended one way moves that hits high frequency balanced traders adversely.
I'm also entirely talking out of my ass in the last paragraph. I don't actually know that any of what I said is true. Just speculation.
Re: Reddit’s profane, greedy traders are shaking up the stock market
#255Earlier quoted context omitted.
I am one of the best options traders in the world. Options dealers don't necessarily sell options. They can also buy them. And "writing" an option means to sell it, so "wrote the contract and sold it" is redundant. Options dealers are not automatically short all of the contracts that they sell. They may already have a long position in that option contract, in which case their sale is a closing sale. Also, I think you…
A comment I'm sure you expected you'd get on this forum: you're gonna have to elaborate a bit on/defend a bit that opening line there about being one of the best options traders in the world.
Seems like WSB is leaking.
Re: Reddit’s profane, greedy traders are shaking up the stock market
#256Earlier quoted context omitted.
A lot of automated trading is arbitrage and market making, where such a trade would not really be an issue. Regardless, option trading tends to have human traders behind the wheel, and they're trained to figure out what's going on (trading options is similar to playing poker).
A reasonably sized trade of wing options (far-OTM calls or puts) should be expected to move the volatility implied in the prices of options at and around that strike. I would call this "vol impact" or "skew impact." Go buy 5k AAPL Jul 250P tomorrow morning, and see what happens to the implied volatility of the offer on that contract by the time the market closes that same day. Market makers are sensitive to wing trad…
5k contracts is a massive trade my dude. At a multiplier of 100, that's a notional volume of 500k shares. That ought to move anything. Even AAPL as market makers balance their books. But I mean, generally these are one leg of a 4 leg option trade strategy. So it won't actually be a big net notional exposure in most cases (apart from having trades on the underlying to hedge themselves out).
Re: Reddit’s profane, greedy traders are shaking up the stock market
#257Earlier 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…
There is no way Wall Street is using trades by retail traders as a signal (except maybe to counter-trade them). Also btw Wall Street can easily differentiate trades made by big players versus hordes of retail traders, because the banks and HFT firms are who executes the trades from retail brokerages. Retail brokerages like Robinhood don't have the authority to execute trades. They subcontract to a HFT firm who then u…
What does counter trading and running circles around clueless retail traders mean?
Is that another way of saying that retail traders buy on the offer and sell on the bid while HFTs buy on the bid and sell on the offer?
Re: Reddit’s profane, greedy traders are shaking up the stock market
#258Earlier quoted context omitted.
I'm going to guess, based on what I know about diversity and inclusion. It's the fact that people are called retards, autists, and homophobic slurs. To some it's about "having thick skin". To others it's about normalizing "hate speech". It really depends on what your life experience is to determine which camp you fall in. If you've been on the receiving end of hate speech or discrimination, you tend to be in the seco…
> If you've been on the receiving end of hate speech or discrimination, you tend to be in the second camp. If you've lived a relatively privileged life in terms of 'fitting in' to the world around you, you tend to think people just need to grow thicker skin. As someone who fell into category 1 for most of my childhood, I think you have the labels reversed. I think it takes a tremendously sheltered privileged life to…
You hit the nail RIGHT on the head!!! Only privileged suburbanites care about this type of stuff, because they don’t have any real problems to worry about.
Re: Reddit’s profane, greedy traders are shaking up the stock market
#259What's wrong with ordinary traders taking advantage of the flaws in dealers and big money bots? Aren't they (dealers and such) the ones who have been doing it forever?
Exactly. As someone who has made substantial profits over the years (including a six-figure profit on the recent TSLA and SPCE rally) thanks to WSB, it brings me great joy knowing I’m pocketing money straight off Wall Street institutions.
WSB tends to celebrate losses (aka “loss porn”) and it’s well-deserved - many tend to do really stupid things (like “YOLOing” 100% of their portfolio into a single position). But if you know how to manage risk effectively (Kelly’s criterion etc) it’s possible to consistently make profits.
Amidst the chaos of shitposts and degenerate gambling there is often quality DD hidden throughout. The odd thing is I suspect WSB has reached critical mass to the point where it’s achieved feedback loops and can actually move markets, thanks to algorithms misidentifying unusual options volume caused by wild speculation & shameless gambling.
Re: Reddit’s profane, greedy traders are shaking up the stock market
#260Earlier quoted context omitted.
"Automated trading systems will probably raise alerts on that stock since someone must know something for that to happen." Unlikely. Automatic trading systems will not see their trades. Most (if not all) of WSB trades are done through the Robinhood app. Robinhood users are not charged transaction fees executing their trades, they can do this because they sell their flow (these orders) to HFT firms. HFT firms are will…
>Most (if not all) of WSB trades are done through the Robinhood app. Robinhood users are not charged transaction fees executing their trades, they can do this because they sell their flow (these orders) to HFT firms. Doesn't this make it more likely, rather than less likely, that HFT algos are affected by WSB madness?
I'm guessing that they are implying that the HFTs already know that these trades came from robinhood (because of order flow feed) , and therefore would discount them heavily on having inside knowledge.