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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

#341
post #177

Earlier quoted context omitted.

No, the article got it right. It's annoyingly common for people commenting on a subreddit to use a shortened name of the subreddit when discussing it. Since reddit will link you to anything starting with "r/", sometimes there's no subreddit there, sometimes mods will claim it just to be safe, and sometimes it's a cow. (r/cow = r/competitiveoverwatch)

Well the parent got it right in that r/wsb and r/wallstreetbets are literally two different subreddits. The former has a lot less volume but it nonetheless exists.

Any string of "r/" is a link to a subreddit, which in this case, the mods of the original have happened to create so that no one else squats on it. As used in reddit comments and this article, they are not referring to the actual "r/wsb" subreddit when they type those characters, though; it's just an abbreviation.

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

#343

Earlier quoted context omitted.

Case and point, just five years ago Redditors figured that out that by upvoting a post of image of a potato titled "Gaming Console. If you upvote this potato it will show up on Google Images when people search for Gaming Console." It even borked their news algorithm - https://i.imgur.com/A0zLPSR.png

Not trying to be a jerk but the phrase is "Case in point".

this... makes a lot more sense

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

#344

Earlier quoted context omitted.

Honestly, I'm convinced that most know how to hit F12 on Firefox and edit HTML pages to 'prove' that they are buying meme stocks. I have zero expectation that their 'proof' is even proof. All modern web browsers have a debug mode that allows you to easily edit HTML.

Most of the screenshots are from Robinhood mobile and real. Who's actually posting what is the difference and you only see the big gains and losses since they're exciting and not the thousands of people losing money daily on bad trades.

Sports gambling culture operates almost exactly the same way. The guy who shows you his $1000 at beginning of the season for the Chiefs to win the Super Bowl is already $100,000 in the hole from other bets.

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

#345

Earlier quoted context omitted.

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.

Thanks for this. That particular section was definitely apropos.

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

#346
post #211

Earlier quoted context omitted.

I wish people talked more about how Robinhood really enabled this sort of reckless speculation. Day trading on your smartphone was not really a "thing" pre-Robinhood, and then they came along with commission free trades on both stocks and options. So not only did they make it easier to day trade given no explicit fees for doing so, they also mainstreamed options trading, which is actually what most people in WSB do a…

The Gain/Loss posts on that sub are surreal. There's a guy that made 500k with 12k in two weeks with a series of daily bets that is off the charts.

The depressing reality of these is that they're no different from lottery winners in that's they basically got lucky, with the added, pernicious factor, that they probably convince themselves that there was some type of skill or finesse which means they will likely keep trying.

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

#347

Earlier quoted context omitted.

But was P&D happening?

P&D happens with penny stocks, where a small amount of interest can yield very real change. You can't P&D with any big cap. And the best part with P&D is that most everyone involved knew what was happening, but they played along hoping to get out before it peaks. And it was very real. You could get the emails pimping whatever the OTC stock was and watch as it pumped up, pumped up, pumped up, and then crashed to nothi…

I'm aware of this, but the parent said they did an investigation and I'm asking if there was any actual foul play going on or just suspected.

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

#348

Earlier quoted context omitted.

> 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...

No, that’s not how any of this works. Pension funds aren’t sitting in HFT systems.

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

#349

Earlier quoted context omitted.

No, he says it exaggerates the ups and downs, so you get higher highs and lower lows. That is not "creating upward momentum" in an ordinary sense. Also, it takes some guts to defend the idea "this perpetuates an upward movement" by quoting someone explicitly saying it doesn't. A finite upward boost and an infinite upward boost are different things, as explicitly noted in the quote you just pulled and in your comment…

Oof, yeah, I misspoke. I was responding to the parent comment which said that r/wsb can’t move markets when, 30 minutes prior, I had read something (Matt Levine’s take on it) with a claim to the contrary. Thank you random HN commenter for pointing out my flaw in the “perpetual upward” comment. Levine’s take still claims that r/wsb can technically move the market, no? Or should I go back and re-read? Maybe I interpret…

As I read it, the stock price is basically modeled as a "true value" + noise. You can't observe the true value, but you can estimate it by characterizing the noise.

The effect of buying the stock with leverage instead of out of pocket (which is what call options let you do) is that the noise is amplified. The "true value" component doesn't change. Thus, when the noise is increasing the price, the price is higher than it otherwise would have been, and when the noise is decreasing the price, the price is lower than it otherwise would have been. Imagine the difference between P(x) = v(x) + cos n and P(x) = v(x) + 2 cos n.

Can technically move the market? Sure, but everything that happens in the market is technically moving the market. The main effect (as discussed in the Matt Levine pieces) is to increase the volatility of the stocks in question.

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

#350
post #336
post #173

Earlier quoted context omitted.

I wouldn't want to degenerate this into the morals part behind this, but I do wonder how you feel about this now looking back: To be +ve you had to exist in a world watching people go -ve, in a very direct way. I only have managed funds for my pension, I appreciate its not holier-than-thou its just indirectly filthy instead of mired in the pigpen. Total system? its mostly a zero sum outcome against normal incremental…

hmm, I take it you mean +ev and -ev ? not sure if I'm revealing too much, but as someone who is not white, or one of the "model minority", who grew up in what many would consider the "hood", attended one of the worst high schools in the country, I have felt my life has been inherently -ev due to the zipcode I grew up in / the color of my skin, who sees the many anti-AA views on this forum (advantages gained from AA a…

Thank you for a very informative answer. Glad it felt good, hope it continues. I don't think pig-pen got to quant, but 55 years later, who can say?

I am a believer (bad word, but no other choices) in AA and I hate the anti-AA rhetoric. I still struggle when people who could have benefited from AA either by gender or race say they don't like it, but I won't pretend they don't say it, or there aren't problems. AFAIK its always the best candidate, its just AA re-defines what 'best' is in ways some other people don't like. The whole PC/SJW language is just shit: its labels to deny the underlying problem.

I am the other side of this problem, never faced the bias, never had to overcome it. I might even be part of the problem. Can't hire wisely if you don't know your own biases. That said, hiring women and minorities into my ICT space is just hard, and thats from a not-for-profit with 80 staff and more cultures than I can count. We still put women into finance and HR more than into tech and we still have next to no leadership outside the anglo core. The board is mixed. So there's that, I think it helps. (not in the USA btw)

Money is colourblind.. kinda. I do not believe this is completely true. I don't know any Koch brothers, or Walmart owners, or Peter Theil, and so I work in third hand knowledge. I do not believe they are colour or politics blind: their view of money is complicated. But I do believe you when you say that proven skills cut more with hiring in the money space, than in other spaces. Indian capital by definition is non-white and there are some standout Indian capital movers-and-shakers who own steel, coal, but who also live in a culture which badges people from birth "other" and that totally freaks me out. (there is one, Sanjeev Gupta, who I will put to one side. He might be capitalist, but he's no racist: he's accormittel and tata steel. he's big)

If you wind up in quant with money, ethical investment will be out there, in the future state, as something to talk about as a sub-set of investment to model. I get, that plays in tobacco and drugs and oil will include speculative gains as they crash and burn, or take off and persist. You would get to make choices in that too: Do you want to make $m on the strength of coal-tar sand mining, as KSA and others dump oil stocks to move to Solar? Or do you want to invest in battery tech to ride the up wave in Solar, but be tied into KSA legals? Do you even have to care? No, you don't. And I won't try to pretend you cannot, and won't say you should, even if I do say I would like you (and others) to care.

I read about black radio/tv entrepreneurs some time ago. People who could have been in the weather underground or panthers, but chose to invest in the system instead. I have also read that Clarence Thomas is not an AA backer, believes its better to prove you got there without the help. I don't respect Thomas for obvious reasons. He's pretty anti-social, never mind anti-socialist)

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