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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

#291

Post by vijucat »

econcon wrote: post #238

I use Robinhood app to gamble on options, most of the times I lose and sometimes I won big to cover all losses. I don't understand options, other than a few things about them which help me trade them It's ok to ignore the big picture. Not everything has to have a profound meaning behind and similar are the stock moves. I believe most of the movements are irrational, so studying fundamentals or anything is going to of…

Since you work out: you must have seen that results accumulate (such as being able to lift more). The problem with the WSB style of trading is that the knowledge doesn't accumulate. It's just gambling all the way down. And you still end up spending time on it! If you'd like an easy-to-read + thin first book on options, I'd recommend Frans De Weer's "Introduction to Options Trading":

https://www.amazon.com/Introduction-Options-Trading-Frans-We...

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

#292

Post by tialaramex »

jamiek88 wrote: post #251
justanotherc wrote: post #160

Earlier quoted context omitted.

Common guys, getting the phrasing right is not rocket appliances.

https://old.reddit.com/r/boneappletea

Their right hand side doesn't mention it, so I'm intrigued whether this sub-reddit pre-dates Language Log naming almost this same type of mistake an eggcorn?

Specifically an eggcorn involves an erroneous analysis, in the name example a person figures an acorn does look rather like an egg and so maybe that's why the name for it is "eggcorn". Likewise "tow the line" mistakes the metaphor as involving pulling a rope rather than standing against a chalk mark ("toe the line") and "free reign" assumes it's about some analogy to absolute power of kings rather than controlling horses.

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

#293

Post by zelly »

vostok wrote: post #257
zelly wrote: post #214

Earlier quoted context omitted.

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?

> 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?

This is market making which is the bread and butter of HFTs. This is the one thing they do which helps, not hurts, human traders.

They can do thousands of trades in the time it takes your nervous system to react and click the mouse. They parse a news headline many seconds before it ever shows up on the internet. They rent satellites to count how many trucks leave factories. They have access to person-to-person dark pool trades that never show up on the normal exchanges.

Algorithmic trading is a secretive black box, but who knows. These are just my speculations from hearsay and random research. If they can make a fraction of a cent from messing with you, they will. It can scale up infinitely. It's just software--there's no marginal cost to do so, provided they are properly hedged.

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

#294

Post by zelly »

pbhjpbhj wrote: post #290
kgwgk wrote: post #282

Earlier quoted context omitted.

> selling order flow data to hft and market making hedge funds but I don't think those funds execute the orders themselves The order flow data is worthless (because the orders come from uninformed traders) the value is in filling them without the risk of being shortchanged (because the orders come from uninformed traders).

Surely the order flow is mostly going to look like noise, random. But things like local information and employee information would provide some signal - correlated trading patterns - that indicates there could be some information available to inform a trade. Allowing one to either trade on the meta-signal or seek the information behind it (and then trade). So if you've got a company and the city in which it's headqua…

I would hope that spying on trades of employees of specific companies would be illegal, but it would not surprise me if Wall Street does use that information.

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

#295

Post by imtringued »

zelly wrote: post #287
cameronh90 wrote: post #230

Earlier quoted context omitted.

Consider that even if you're right 75% of the time, if you bet all your money each time, you're going to go broke pretty quickly. Their biggest losers are probably making essentially random bets in such a stupid way that they lose all their money.

The Kelly criterion provides the optimum bet size given the chance of winning. The adversarial brokerage could use the Kelly criterion and only make a wager commensurate with the likelihood of the trader's failure. It should be profitable. Suppose the brokerage just puts 5% of their cash toward this. It could be a nice profit center without risking everything.

They could also just keep your money since you lost it on bad trades.

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

#296

Post by pbhjpbhj »

alexpotato wrote: post #216
gbronner wrote: post #192

Earlier quoted context omitted.

Hah... The guys on the scox message board automated this pretty well; there was a user named warmcat who even opened sourced some of it. The Reddit comments usually aren't long enough to be meaningful, and I think that there are now organised p&d teams, so that level of investigation isn't very useful anymore

> The Reddit comments usually aren't long enough to be meaningful, and I think that there are now organised p&d teams, so that level of investigation isn't very useful anymore The Yahoo comments usually weren't that long either. The key point was that while each individual post gave you, on average, only a little but of information, in the aggregate you got enough to narrow down who the source was to within 5 people.…

With something like Robinhood, where you're trading, presumably they have your bank details (and phone details) so pinning your trades on a irl person is a given.

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

#297

Post by randomcarbloke »

zelly wrote: post #294
pbhjpbhj wrote: post #290

Earlier quoted context omitted.

Surely the order flow is mostly going to look like noise, random. But things like local information and employee information would provide some signal - correlated trading patterns - that indicates there could be some information available to inform a trade. Allowing one to either trade on the meta-signal or seek the information behind it (and then trade). So if you've got a company and the city in which it's headqua…

I would hope that spying on trades of employees of specific companies would be illegal, but it would not surprise me if Wall Street does use that information.

it isn't illegal and you can do it yourself, there are websites that show in (near) real-time interesting moves by employees/directors of companies liquidating or acquiring shares in their company.

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

#298

Post by abbadadda »

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…

I disagree and I think your "come on man" comment is ignorant, as though a journalist did not put in effort on the article you so blithely dismiss. On top of that your lack of insight or significant analysis is stunning for a comment with 100+ upvotes. And no, I'm not on Reddit. As you offered nothing but your opinion I'll leave this as mine.

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

#299

Post by pergadad »

maayank wrote: post #288
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…

> 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. The trading system and its operators deserve whatever fate results from such a decision.

But they make money anyway, it's the customers (pension funds) that lose...

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

#300

Post by sireat »

lmm wrote: post #247
zelly wrote: post #219

Earlier quoted context omitted.

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.

Basically a bucket shop: https://en.wikipedia.org/wiki/Bucket_shop_(stock_market)

Those are considered illegal in US. CFD and like skirt the law here.

The big problem with bucket shops is that they tend to not honor the bets once you start winning too much as Jesse Livermore found out in late 1890s.

Still common today with all the fake forex exchanges. The rare winners have trouble getting money out.

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