
Reddit’s profane, greedy traders are shaking up the stock market - hashberry
https://www.bloomberg.com/news/articles/2020-02-26/reddit-s-profane-greedy-traders-are-shaking-up-the-stock-market
======
safog
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 effort to pump SPCE for instance.

~~~
AnotherGoodName
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 when WSB were meme-ing on TSLA and a whole bunch of
them bought $1000 call options when it was $400. Shortly afterwards TSLA
skyrocketed in value.

~~~
mixedbit
Can they be bad at trading? [https://xkcd.com/2270/](https://xkcd.com/2270/)

~~~
zelly
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?

~~~
lmm
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.

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

~~~
blaser-waffle
What are some examples of Fake Forex shops?

~~~
sireat
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...](https://www.elitetrader.com/et/threads/is-there-an-actual-market-for-
cfds-or-are-cfd-firms-just-bucket-shops.318978/)

~~~
blaser-waffle
Good reply. Thank you for the detail!

------
remote_phone
As someone who was a very early member of /r/wallstreetbets:

1) /r/wallstreetbets and /r/wsb are two different subreddits. /r/wsb are for
those that got banned from wallstreetbets

2) When wallstreetbets first started it wasn’t as crazy as it was today. There
were some aggressive gamblers but there was opportunity for real due diligence
and decent conversation. I contributed more than a few posts back in the early
days. After it got crazy I unsubscribed until recently. Robinhood and the
options trading and margin trading has really made things crazy. I see absurd
bets made on there that make me both jealous and glad I’m not 25 with too much
money to gamble.

3) those who say it’s likely too small to make a difference go check out the
timing of the Lumber Liquidator due diligence post and the subsequent jump in
price. I don’t know what the difference is between pump and dump vs posting
due diligence but there definitely was a correlation. I wish I still had my
data account because I would love to see the exact correlation of options
trading and stock trading to the posts.

4) the memes and gifs are hilarious if not vulgar and bigoted. But if you have
thick skin some of the memes are very well made.

~~~
floatingatoll
3) You don’t need to have complete data to report what you think is a market
manipulation scheme to the SEC for investigation:

> _Tips - Report a potential violation of the securities laws directly to
> enforcement@sec.gov. Please do not use this email box for general comments
> or questions._

~~~
manicdee
Just remember that reporting things to the SEC makes _you_ the enemy.

The SEC exists to protect the people exchanging securities.

~~~
murph-almighty
I just want to point out that "protecting the people exchanging securities" by
extension also means "people who trust money managers to exchange securities
on their behalf", which would include most people with a 401k or a pension,
not just some stereotypical stock jock. Come on, dude.

------
alexpotato
Back in the early 2000's I worked for a company that was was hired (via
intermediary law firms) by publicly listed companies to investigate pump and
dump schemes on Yahoo message boards (you might call that the "Reddit of the
early 2000's").

It involved a lot of web scraping Yahoo with Perl (specifically LWP) and then
lots of analysis by humans with some help from automated tools. For example,
if you plotted a histogram of each user's posts, you could clearly see when
someone was at work (posted between 9am and 5pm with a drop off around noon)
and at home (posts between 6pm and 2am with a peak around 10pm).

The analysts would often find a piece of information from a 2 year old post,
e.g. 'Go Cubs!', and a one week old post "I just attended my 20 year UofI
reunion" and quickly be able to narrow down on who the person might be.
Coupled with Lexis Nexis (which was just coming online at the time), we
routinely narrowed down individuals to just one possible person.

Given that this was done back in the early 2000's using ancient servers (by
today's standards) and basic statistical analysis with a lot of legwork, I
would be surprised if there weren't companies also trying to find the people
on Reddit today.

~~~
gbronner
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

~~~
alexpotato
> 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. From there, you could usually narrow it down using
"legwork" etc.

~~~
pbhjpbhj
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.

------
cdiamand
Hey! I'd like to shamelessly plug my new project here:

[https://topstonks.com](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 :)

(The language can be a bit crude, so this might not be for you, if that is a
concern.)

~~~
shiftpgdn
FYI: Since you're in the US you can drop the double opt in on your news
letter. I'd setup your page to feed to an Excel sheet or something and use
that to feed into your email sending software.

~~~
dnr
No, please do _not_ drop a double opt-in on this or any situation where you're
collecting email addresses. People mistype email addresses all the time.
Always verify email addresses before using them.

(This is a personal pet peeve since I have a short email address that tons of
people sometimes think belongs to them, and get a huge amount of mail intended
for other people.)

~~~
cdiamand
Thanks for the heads up. Reenabled!

~~~
jcrites
Good choice. Just to elaborate: double opt-in is expected behavior from
customer-centric companies, and expected behavior from good actors in the
email ecosystem. It's not necessarily required by law in the US, but it's a
good practice nonetheless: always make sure you have permission from a
recipient to send an email.

Anyone can pass anyone else's email address as input to a form, so simply
receiving an address as input is not actually permission. If a newsletter does
not employ double opt-in, then it will eventually end up on a list of "single
opt-in newsletters" which are used to harass people by subscribing their email
to a ton (100s or 1000s) of newsletters that they don't want. People who are
the victim of this will rightly mark those messages as spam, causing your
email reputation to drop. Random Internet bots will also submit subscriptions
using your form with weird addresses for who-knows-what reasons. It's a very
good idea to have some data validation to make sure garbage doesn't end up in
your list, and double opt-in is one of the best ways to achieve that.

Furthermore, competitors might maliciously attack you by subscribing random
email addresses to your list. They can get these addresses from data dumps
from compromises (like what haveibeenpwned is using). Sending to these
addresses will harm your reputation because recipients will mark as spam, or
will fail to interact with your messages which is also a spam signal. Smart
malicious competitors will cause you to start sending to spamtraps.

The best defense against being manipulated in these ways is double opt-in.
Lastly, your email list _as such_ has more value overall if you know that
every single entry was confirmed by double opt-in.

As a corollary, you should remove addresses from the list if messages to the
address start bouncing, or if you receive a spam complaint from them;
sometimes people are lazy and will mark spam instead of unsubscribing.
Ideally, support the List-Unsubscribe feature so that people can unsubscribe
from it directly in their email client. A good email platform will help with
all of these things.

I consider single-opt-in use of email addresses to be a dark pattern or anti-
pattern in most contexts, especially non-transactional contexts like
newsletters. Any sort of recurring communication needs double opt-in.

~~~
aaron695
> I consider single-opt-in use of email addresses to be a dark pattern or
> anti-pattern

This is wrong.

I want to be able to enter an email address and get a newsletter. This is good
UI/UX blah

There is nothing dark about helping a user using single opt in. Single opt in
is great and preferred.

But because of the world we live in, as you explain well, we have to make
everyone's lives a PiTA by securing it.

It might be a anti-pattern collecting emails to easily, since the Spam Bots
might punish you because of bad actors, which reduces your email reach.

But it's also a anti-pattern to think double opt in is normal. If you can get
away with not doing it, then don't. ie. I see idiots doing it in corporate
settings or after having paid money

~~~
derefr
> There is nothing dark about helping a user using single opt in.

Someone thinks my email address is their email address, and keeps filling it
in in various places as "their" email address.

They seem to live in France, and so the things they sign up for are in French.

Sometimes, these are double opt-in, and I can just ignore them.

Other times, I suddenly have to figure out how to unsubscribe from a
newsletter that's in french.

Often, the "unsubscribe" link is just a mailto link to their customer service,
and now I have to hope they can understand my English as I ask them to remove
me from their list.

Also, this same ne'er-do-well has taken out loans with my email address as one
of their few pieces of contact information. So now I have a loan company
trying to get money from "me." Obviously, loan companies aren't going to be
very accomodating when you tell them they have the wrong address. _That 's
what they all say_, no?

(It's not quite identity theft, as the loan people really are after _the other
guy_ , not me. It's not _my_ credit score being impacted. They just emailed me
because mailing the address on file, phoning the phone number on file, etc.
didn't work.)

Wouldn't it be great if I could contact this person to tell them to stop?
Well, think about how I could accomplish that for a moment. All I know about
them is... my own email address!

------
thih9
> 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.

~~~
tylerhou
They detect your private mode using JavaScript; you can bypass by pausing
script execution with the developer console immediately after the article
loads.

~~~
thih9
It doesn't really work, some users get treated as bots, see:
[https://news.ycombinator.com/item?id=22428193](https://news.ycombinator.com/item?id=22428193)
.

------
zpwe
So I was one of the first people on Wallstreetbets to post options YOLO around
2015, back then it was nothing but rainbow dick banners and penny stocks. I
had previously interned at a brokerage and had just graduated college with a
degree in physics(I understood the math behind options). Not hearing back from
quant trading firms because I guess BSc is not enough for them, I said fuck it
and started taking speculative bets on my own, lost half before I went all in
on what I believed to be a fraudulent stock that was getting crushed, bought
really far OTM weekly puts and was lucky that the CEOs collateral was
liquidated which further tanked the stock. I then just bought AMD SQ when it
IPOd and put the rest into ETFs and only traded small amounts on options the
side. Just funny to see how far people ran with it. I tried warning people
that while I wasn't a "pro" and I was playing up a degenerate trader/4chan
character I was aware of the risk I was taking but we know how that turned
out.

~~~
rolltiide
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 reddit: not being risk adverse.

But then it became similar to other finance communities by having an absolute
anathema to anything bitcoin or crypto. The mods there didn't seem willing to
see them as options trades that never expire. Crypto has similar returns to
options contracts, without the time limitation or theta decay or an actual
option. If you are an options trader, crypto is _not risky_. This still seems
to be the case there, so thats been making it less interesting to me.

If I do fund an equities options account and want to trade earnings or some
follow on swings for the rest of the quarter, I still like to enjoy the memes
and laughs with the WSB crowd.

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

~~~
WA
> 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.

~~~
rolltiide
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

------
gruez
Wait, people actually go to /r/wsb for investment advice? The entire time I
thought it was a mix of posting wins/losses along with some memes/humor.

~~~
outworlder
It is exactly that. Sometimes there's actual, solid, investment advice hidden
in posts. Sometimes.

~~~
rapsey
Wsb is in the honey moon stage of a subreddit where you find a ton of amazing
humor and and an occasional deeply insightful comment.

------
ra5
As a regular of WSB, this article is just absolutely absurd. Which I guess is
the regular for Bloomberg these days (seemingly the Buzzfeed of business news
it appears). All you'll find on WSB is a bunch of homophobic bored desk
workers. The idea that subreddit of only a few thousand guys (mostly) with an
extra $500 to blow on meme stocks can move a stock in _any_ significant way is
laughable.

~~~
omegaham
Yeah, I was under the impression that ~95% of posters on WSB don't actually
day trade and are just there to meme and laugh at the trolling/idiocy. The
other 5% are the fools YOLOing their college loans.

The charm of the subreddit is that it's hard to figure out who's who.

------
chrischattin
I have a pet conspiracy theory that WSB is used by insiders to signal trades
to each other disguised as sh*tposts and hidden among the rest of the
overwhelming noise.

I love WSB, though. It's been a constant source of laughter and entertainment
over the past few years. Now that it's hit the mainstream, I hope the wild
culture doesn't dilute down too much.

~~~
rantwasp
it’s not insider trading if the info is public /s

~~~
nexuist
"how can we have insider knowledge if none of us have knowledge?" \- actual
Reddit comment quoted from article

~~~
rantwasp
_big brain time_

------
PragmaticPulp
Never underestimate the survivorship bias in public stock picking forums.
Reddit is no exception.

There are a few honest stories of losses and failure in WSB, but the majority
of loss stories or bad picks quickly fade into obscurity or are deleted by
their original posters. What remains are the highly-upvoted success stories.

~~~
buzzkillington
1 million in losses makes you a mod.

If anything wallstreetbets loves massive loses more than massive gains.

------
Traster
This article doesn't seem to address 3 big issues: Firstly, most of the stuff
on /r/WSB is talking about massive market cap companies like TSLA and AMD.
Some punter putting his life savings in AMD puts is not going to actually move
the market. I would love to see numbers on this but my gut says that reddit
posters posting about their $50k investment in a company that is worth several
billion is just retail noise. It's not moving stocks.

Secondly, maybe there are some people genuinely attempting to use the forum to
pump and dump but frankly, they're probably not succeeding and even if they
are, that's exactly the sort of person the SEC is actually interested in
prosecuting. But literally there is no evidence it's happening at all, let
alone at any scale or is profitable.

Finally, I love the idea that market makers are just sitting there going "sure
is weird that we've seen a lot of retail flow on MIK, better continue straight
forwardly hedging using the future and not exploit this predictable market
pattern"

------
2OEH8eoCRo0
/r/wallstreetbets is one of those strange communities that provides nearly
limitless comedy. Best watched from a distance.

------
OJFord
Matt Levine's take:
[https://www.bloomberg.com/news/newsletters/2020-02-26/money-...](https://www.bloomberg.com/news/newsletters/2020-02-26/money-
stuff-reddit-posters-pick-the-stocks-now)

I'd really recommend subscribing (free, email, don't think there's RSS) if you
don't already (I got the recommendation on HN). He's prolific though, rarely a
day without an email, and often two or three - it wasn't long before I
couldn't keep up; I just skim and read more thoroughly those that grab my
attention now.

~~~
austhrow743
Pretty sure he does one per weekday unless he's off work. Don't recall ever
receiving multiple in the one day.

------
Exuma
Yes people are "greedy" who trade stocks. GTFO of here with that hype shit.

~~~
strbean
How dare these filthy peasant redditors profane our sacred and pure
institution of derivatives trading with their foul lust for social mobility?

------
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.

------
econcon
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
offer nothing other than wasted time.

I love the crazy vibe of that subreddit which motivates me to take crazy
positions which I'd have never taken if I carried on with my risk averse
friends.

Even if probability of becoming double digit millionaire from a single digit
millionaire is small through options trading. It's well worth it because once
you've saved enough to retire, why not bet on random positions? You never know
when you'll fall on the long tail end of the game and experience the Black
Swan event which changes your life forever.

Then I am also doing other things which people might consider crazy like
steroids to maintain Greek god physique - considering neither I am model,
atheletic or body builder.

YOLO is not bad way to live if it gives you the highs you need move out of
sorrows and sufferings.

~~~
vijucat
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...](https://www.amazon.com/Introduction-Options-Trading-Frans-
Weert/dp/0470029706)

~~~
econcon
Look into Green Lumber Fallacy.

~~~
vijucat
Good one! This actually does apply to options trading. Pricing quants may need
to be masters of stochastic calculus, Ito's lemma, et al, but if you're
trading and not pricing them, this analogy applies: even riding a bicycle,
when described with physics equations, probably involves higher-order calculus
that would put 2nd order options greeks to shame, but one does not need to
understand the maths to learn cycling or even be the world's best cyclist!
Similarly, if you trade the same instrument enough, you build "muscle memory"
for how it moves, i.e., you get a feel for vega, vanna, et al which is almost
visceral. The practitioner may use informal descriptions like, "uh oh, I can
feel it bend now" rather than calculus to refer to a gamma-based acceleration
of option price, but it is perfectly good enough.

------
cityzen
Couldn't you replace this headline with, "Wall Street's profane, greedy
traders are shaking up the stock market" and have it be as valid, if not more,
than talking about people on reddit?

------
bitxbit
People dismiss wsb but gambling is a big issue here in the US. This is exactly
what happened during dotcom.

------
holychiz
This is giving wayyyy too much credit to a sub-reddit that's all about poking
fun at the trading game, and each others. Please don't throw your money away
following them.

------
throwaway3157
I recall there's a way to sign up to an email subscription of Matt Levine's
writing, without Bloomberg and their pop-ups. Anyone know how to do that?

~~~
derivagral
Maybe this? [0] I had an issue where I was sub'd for a while, "lost" emails,
then it shows up fine again.

[0]
[http://link.mail.bloombergbusiness.com/join/4wm/moneystuff-s...](http://link.mail.bloombergbusiness.com/join/4wm/moneystuff-
signup&hash=54223001ca3ffcf40f2629c25acea67a)

------
TheRealPomax
Wow, this title sure got changed to something far more inflamatory than it was
an hour ago, when it was something closer to "reddit picks your stock". Nice
one, bloomberg.

Oh wait, Bloomberg's trying to run for president?

Owning one of the authoritative news outlets feels like maybe that's an
illegal conflict of interest, there, then.

------
razster
For those interested in r/WSB's reactions...
[https://www.reddit.com/r/wallstreetbets/comments/f9sx9d/cong...](https://www.reddit.com/r/wallstreetbets/comments/f9sx9d/congrats_autists_the_cover_of_bloomberg/)

------
traeregan
Someone started a cryptocurrency version of WSB recently as well:
[https://www.reddit.com/r/SatoshiStreetBets/](https://www.reddit.com/r/SatoshiStreetBets/)

------
jborichevskiy
Related: r/pennystocks

[https://twitter.com/packyM/status/1229910436184756225?s=20](https://twitter.com/packyM/status/1229910436184756225?s=20)

~~~
52-6F-62
I can't tell if they're being serious or not. One of the commenters was right.
It's almost exactly Stratton Oakmont
[https://en.wikipedia.org/wiki/Stratton_Oakmont](https://en.wikipedia.org/wiki/Stratton_Oakmont)

------
dang
Related column:
[https://news.ycombinator.com/item?id=22425390](https://news.ycombinator.com/item?id=22425390)

------
burgerquizz
Are the effect of the coronavirus on the stock market could be opportunity for
investing? The SP500 went down 8% this past 5 days. I'm wondering if that will
go lower those next days.

I have a bit amount of money on the side, I didn't know where to invest. Would
now be a good opportunity to lump sum all the money, or would you Dollar Cost
Average?

Anyone else with the same dilemma, and would have more arguments? Or maybe an
other perspective on that?

~~~
flashman
this seems like a conversation to have on wallstreetbets rather than HN

------
jasonmunro
Sentiment analysis is not new, and I would imagine it's ancillary at best to a
proper trading outfit. Well equipped market makers and HFTs make money on
price movement (and exchange rebates). A flurry of out-of-the-money calls is
unlikely to adjust an underlying equity price significantly enough to be
statistically important.

------
justlexi93
So subreddits are either echo chambers or hopelessly conflicted? I'm not
defending WSB but isn't the entire point of internet forums / reddit
discussion to argue about things? I absolutely hate any subreddit where only
one train of thought is allowed and everything else downvoted.

------
neonate
[https://archive.md/GncCZ](https://archive.md/GncCZ)

------
m3kw9
Usually if you think you are fcking someone in the stock market, you are
usually the one being fcked

------
c0nsilienc3
The article's opening paragraph might have been a somewhat accurate depiction
of reddit 12-13 years ago, but it's changed a lot since then. It's hard to
take the author that seriously when the bias against reddit is that clear in
the lede.

------
technotony
> After years of indifference, individual investors seem to be finding their
> way back to stocks, for better or worse.

There's an old adage in London that it's time to sell when the retail buyers
start entering the marketing...

------
sombremesa
In other news, Vegas' profane, greedy gamblers are shaking up the economy.

~~~
rjbwork
I've never gambled before in my life. I've always been a very conservative
indexer, but... I've got some spare dough. I have always been quite interested
in the finance side of things, having worked under and been good friends with
a dude with a graduate degree in Quantitative Finance, I spent years learning
about random bits of finance stuff from him - enough that I knew a good bit
about of some of /r/wallstreetbets' favorite investments, options.

I've been having a pretty good time perusing the forum and making bets of my
own, even making a decent profit (relative to the money put in). I don't risk
more than I'm willing to completely lose though. Some people on that forum are
a quite reckless.

~~~
sombremesa
I'm curious why you chose to reply to me specifically with this. I assume you
agree that there are both kinds of people in Vegas, and the analogy still
stands?

------
jb775
New side-project idea: WSB sentiment analysis tracker linked to RobinHood API

------
girishso
What'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?

~~~
synaesthesisx
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.

~~~
girishso
Interesting you mentioned "Kelly criterion", I have been interested in it for
some time and the articles I read seemed to point out that it works "best"
only after the fact (after the trade has been executed). How do you deal with
this?

~~~
synaesthesisx
This is a common way to implement it:
[https://www.investopedia.com/articles/trading/04/091504.asp](https://www.investopedia.com/articles/trading/04/091504.asp)

It’s not foolproof, but generally the idea is to keep positions small
(relative to portfolio size) and quickly take profits - which is critical when
dealing with something as insanely volatile as options. With options one can
also improve their odds with intermediate strategies (such as call debit
spreads, straddles/strangles during earnings). I often will temporarily buy
calls on something like TECS (-3X Inverse Technology ETF) when I’m speculating
on multiple tech earnings plays within the same week - that way if my calls on
Apple or Microsoft don’t pan out it’ll be offset by the inverse ETF gains.
Options can be an incredible tool, and used properly can be excellent for
managing risk effectively.

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fabioborellini
I can't even scroll the page on my computer using Safari. It just freezes
immediately. Is a Core i5-6500 already too old for Web browsing?

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AdmiralAsshat
A very prescient XKCD (which as afar as I can tell, was released before the
article was published):

[https://xkcd.com/2270/](https://xkcd.com/2270/)

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TurkishPoptart
How is anything WSB does worse than say, high-frequency trading?

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jobseeker990
Can anyone explain the strategy it's talking about?

~~~
JakeTheAndroid
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.

~~~
henryfjordan
A lot of the craziness is from exactly what bets they are making. The cool
thing to do is to buy "Out of the Money" options (where $TSLA might cost
$420/share but the options are for $450), sometimes with borrowed money. These
options are dirt cheap, so you can buy a ton of them. Usually you lose your
whole investment when the options expire, but if the stock jumps over the
price of the option you can make a ton of money.

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m3kw9
Wall Street will catch on and come around to set a trap

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throwawaynothx
document.getElementById('graphics-paywall-
overlay').remove();document.body.style = 'overflow: auto;'

------
jokoon
what if it's just HFT with some natural language AIs posting on reddit?

------
vernie
Oh my God they're using swears?

------
yCloser
Paywalled site, T$DR.

------
hoseja
OK, Boomerberg.

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nelsondev
tl;dr the wallstreetbets hive mind has the purchasing power of a mid size
hedge fund

if there’s roughly 1000 upvotes on a piece of content, and assuming only 1% of
lurkers ever up vote; that means there are roughly 100,000 people taking
investment info from this sub.

let’s say they have an average portfolio size of $10k, then 100,000 users *
$10,000 = $1 billion dollars.

assuming they split the portfolio by meme %, so like 1/3 TSLA, 1/3 SPCE, 1/3
AMD; then we’re looking at like $330 million in trading volume going into
SPCE.

when you look at the last couple days of trading volume on SPCE, about
30million shares traded daily, was previously around $10 a share , it about
equals out, that like $300million dollars of meme money did a pump and dump on
SPCE

