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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

#91

Post by JakeTheAndroid »

jobseeker990 wrote: post #80

Can anyone explain the strategy it's talking about?

The WSB strategy: Buying call or puts instead of individual stocks. Calls are when you think a stock is going to go up, puts are when you think it's going to go down. Instead of having to buy an individual stock, you can simply buy a call because you think the stock price will go up. If it does go up like you project, then you will make money. If instead it goes down, you lose money. This is generally a non-standard type of trade for the common investor.

It's easy enough on the surface to understand, but much harder to actually execute, because you generally do want some deeper understanding of market trends and how stocks move. That barrier of entry hasn't slowed down most people on WSB, because the loss porn was kind of the point of the subreddit. They didn't really care if they guessed right, they cared about having the most daring bet.

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

#92

Post by vidanay »

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…

The ONLY way that I would believe WSB is "manipulating" anything is if some quant has an AI bot that scours social media and is using that to influence their trades.

So...a second order derivative manipulation at best.

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

#93

Post by henryfjordan »

DennisP wrote: post #63
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…

So your theory is that they're terrible traders, and your evidence is that they made huge profits on call options?

A few lucky ones made money on terrible bets. There's no way that the posters to that subreddit are breaking even in aggregate.

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

#94

Post by egdod »

jamil7 wrote: post #89
thih9 wrote: post #6

> You're in private mode. Subscribe to continue reading in private mode. I didn't realise that Bloomberg blocks private mode too. Messages like this assume that tracking is the default and make sure that we keep losing privacy. I really dislike this trend.

Not sure how many here have tried it but it takes all kinds of tricks to scrape Bloomberg reliably. Not surprised they're doing something like this.

Just turn off JavaScript.

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

#95

Post by reaperducer »

asavadatti wrote: post #82
geneticswag wrote: post #74

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".

It's fine, for all intensive purposes.

(This is what happens when a society stops reading books.)

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

#96

Post by zozbot234 »

AnotherGoodName wrote: post #29
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 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.

People buy far out-of-the-money calls all the time, they're actually overvalued compared to fair returns. Setting the strike price that high just makes the option more and more of a lotto ticket: the vast majority of the time it's just going to expire worthless, but that small chance of being "in the money" when the option expires is your jackpot. A fitting choice for that whole WSB attitude.

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

#97

Post by salawat »

jfengel wrote: post #56
thih9 wrote: post #6

> You're in private mode. Subscribe to continue reading in private mode. I didn't realise that Bloomberg blocks private mode too. Messages like this assume that tracking is the default and make sure that we keep losing privacy. I really dislike this trend.

I think it's more apt to put it that monetizing is the default. You could subscribe, though of course that's exposing even more than just tracking. I suspect that if somebody were to invent a good anonymous micropayment system they'd be happy to adopt that instead. They just want to get paid; your privacy just happens to be the currency that's easiest to come by.

>I suspect that if somebody were to invent a good anonymous micropayment system...

They'd also be guilty of of violating AML, KYC, and other money transfer regulations. It would get shut down faster than you can say "Wait! Don't do that!"

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

#98

Post by totalZero »

AnotherGoodName wrote: post #29
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 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" on google.

In other words, demand for volatility via buying options can actually beget volatility in the movement of the stock price.

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

#99

Post by anon9001 »

Spellman wrote: post #31
cdiamand wrote: post #25

Hey! I'd like to shamelessly plug my new project here: https://topstonks.com We're writing about this speculative culture emanating from WSB and 4chan in a daily email. We send out a list of the most mentioned stocks, and do a longer form commentary, with quotes from those communities a few times a week. It's just an email now, but we're going to roll out options analysis and a few other goodies in the coming weeks :…

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.

If it's easy enough to start an ETF, maybe someone should start $WSB that yolos some % of the total fund into far OTM options on meme stocks every day.

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

#100

Post by the_svd_doctor »

thih9 wrote: post #6

> You're in private mode. Subscribe to continue reading in private mode. I didn't realise that Bloomberg blocks private mode too. Messages like this assume that tracking is the default and make sure that we keep losing privacy. I really dislike this trend.

In Firefox, just click on "Reader mode" at the end of the address bar.
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