Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

321–330 of 364 posts

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

#321

Post by blaser-waffle »

sireat wrote: post #300
lmm wrote: post #247

Earlier quoted context omitted.

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.

What are some examples of Fake Forex shops?

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

#322

Post by blaser-waffle »

rantwasp wrote: post #83
metalliqaz wrote: post #73

Earlier quoted context omitted.

infinite money!

cannot literally go... sideways what about box spreads? it’s foolproof!

I mean didn't the dude come out ahead? To the tune of like $10K?

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

#323

Post by samirillian »

Interesting parallels w Bernie bro story: we can't tell if they actually have any influence, and we can't tell if they did have an influence whether or not that would be a good thing. All we really know is that the old school whales like Bloomberg find them annoying.

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

#324

Post by nickles »

zelly wrote: post #293
vostok wrote: post #257

Earlier quoted context omitted.

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…

Your comment has a lot of misinformation in it.

> This is the one thing they do which helps, not hurts, human traders.

Providing liquidity is their job, and it benefits the market as a whole. If market making by HFTs is a good thing, it’s difficult to malign those same firms for, well, making markets.

> They rent satellites to count how many trucks leave factories.

This isn’t their business model in the slightest. Quant funds certainly do this, but HFTs look for alpha in market microstructure.

> They have access to person-to-person dark pool trades that never show up on the normal exchanges.

Institutional investors can use dark pools to minimize market impact when trade large blocks. HFTs don’t benefit from having limited information on these flows.

> Algorithmic trading is a secretive black box

Algorithmic trading != HFT in the same manner that a rectangle is not a square.

> It can scale up infinitely.

HFT strategies don’t scale. ‘Scalable’ strategies support a large amount of capital. HFTs run high sharpe, low capacity strategies.

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

#326

Post by blaser-waffle »

philwelch wrote: post #220
missosoup wrote: post #195

Earlier quoted context omitted.

He actually reiterates the definition he had in the GP comment but then edited out: "Political correctness is a right-wing term used when they want to call somebody X, but may face social consequences for doing so." He thinks terms like 'political correctness' and 'victim culture' are some sort of right-wing slurs for virtuous attributes. He doesn't seem to be aware that this notion doesn't exist for 90%+ of the worl…

Sure, but most of the worlds population will still get irrationally upset at you for broaching social and cultural norms, like depicting Muhammad or denigrating the king.

These are 1) very specific norms, and 2) usually owned directly by the culture. Your devout Saudi is going to get upset if you breach etiquette around Islam, but he's not going to go to bat over mild slurs about Hispanics.

Only in the West do they lose their mind defending the honor of people who are not in their in-group. I'm not sure if that is honorable, or just idiotic.

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

#327

Post by sireat »

blaser-waffle wrote: post #321
sireat wrote: post #300

Earlier quoted context omitted.

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.

What are some examples of Fake Forex shops?

There are many of them in Europe and the smaller ones change names quickly.

Turn off adblock and go to finance and forex oriented sites. You will see many ads for them at least in Europe.

A common marketing strategy for them is to offer heavy affiliate comissions and this leads to make-money-with-forex type of affiliate sites. That's another sign.

Bigger ones would be someone like Saxo Bank which started as a bucket shop in 90s and now is medium sized and somewhat legitimate now.

Another sign to be aware is the use of Metatrader software. Up to version 5 now.

I am sure there are turnkey solutions offering a whole bucket-shop as a service.

Even if there are honest bucket-shops you are still betting against the house not against other players in the market. Might as well bet on horses or sports then.

EDIT: nice discussion here on situation in UK: https://www.elitetrader.com/et/threads/is-there-an-actual-ma...

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

#328

Post by JoeAltmaier »

blaser-waffle wrote: post #326
philwelch wrote: post #220

Earlier quoted context omitted.

Sure, but most of the worlds population will still get irrationally upset at you for broaching social and cultural norms, like depicting Muhammad or denigrating the king.

These are 1) very specific norms, and 2) usually owned directly by the culture. Your devout Saudi is going to get upset if you breach etiquette around Islam, but he's not going to go to bat over mild slurs about Hispanics. Only in the West do they lose their mind defending the honor of people who are not in their in-group. I'm not sure if that is honorable, or just idiotic.

Some in the West include more people in their in-group. Some are not so tribalistic as imagined. From that point of view, they are defending their own.

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

#329

Post by Scarbutt »

totalZero wrote: post #198
goldmanballsack wrote: post #168

Earlier quoted context omitted.

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…

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…

What's your net worth?

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

#330

Post by rolltiide »

WA wrote: post #311
rolltiide wrote: post #279

Earlier quoted context omitted.

I absolutely love that Wall Street Bets has graduated from penny stocks to options bets. It was so frustrating in the earlier days of WSB to want to talk about options. The rules were that "it was the place to talk about VIX and speculative options trades" but it was just full of trash about biomed penny stocks and FDA approval gambles. It was what set it apart from other "finance" communities online and especially r…

> But then it became similar to other finance communities by having an absolute anathema to anything bitcoin or crypto. Thank god. I just recently joined WSB and would immediately quit if this was about shitcoin gambling. Options at least are based on stocks and they have real value. Way different than the inherent value of 0 of crypto BS.

I trade them as digital commodities, which obliterates the stock-like value argument.

Oil was 23 cents a barrel once and people were worried about it crashing to 10 cents. The utility of oil had not expanded and it was a viscous substance without any intrinsic value, yet.

Oil doesn’t need to be physical to retain that reality.

Most commodities, including the largest cryptos, have options on them.

> really fall short on commodities trading, credit trading, crypto trading, amongst other markets.

Exhibit A

Post reply on HN