And guess what? This following of "smart money" is in fact a self-fulfilling prophecy: after let's say Pelosi/her husband bought some stocks some large group of retail traders jump in and pump the price higher.. It likely has a negligible effect on highly liquid names like AAPL or GOOGL but might cause a significant price move for a smaller/less liquid names
And by doing that, we're further enriching members of Congress. We should be taking a mass oath to sell any stock they buy. Then, of course, they'd only invest in potential opponents' corporations. It could turn into a real arms race.
We need to just pass a law already that forbids them from purchasing or owning individual stocks. After all, assuming they aren't trading on insider information, it would be to their own benefit anyway.
Hi, thanks for asking, no it doesn't rely on WSB reddit sentiment, twitter, etc. but instead uses the tools applied in the options trading industry but translated into the language comprehensible to someone without a financial background. For example, it would pick up a short squeeze in GME before it actually happened by analyzing gamma exposure from the options data.
Hey, thanks for sharing your views! The way how retail options trading being done currently is indeed very close to compulsive gambling, since retail traders don't get proper tools and cannot evaluate their risks.
But when implemented properly options trading can provide 2 key benefits: boosting potential profits and mitigating associated risks. How else would retail traders be able to preserve their investments in case of a market crash?
you used the word "investments" again, so I don't think you understood my comment. In the context of your comment, saying "preserve their capital" would be a clearer phrasing. They're trading, not investing - you already call it a trading app, so just keep it consistent.
Also, to be clear: options are still high risk, you can't predict the future. Robinhood options leaves much to be desired, and I think an app focused on options will go a long way for traders because they don't have enough information.
I will also highlight that a lot of people have been burned by not being able to act on their positions via robinhood due to the platform falling over from demand. This is the chief reason I won't do options trading. Would love to see assurances that when I need to exit a position i'll actually be able to, such as having an SLA.
By "investments" I meant shares owned by retail investors, and in case of a market crash options can serve as a cushion. Also, everyone has a different understanding of a difference between "trading" and "investing", in most cases when the investment horizon is less than 1 year ppl call it "trading"
You say that "options are high risk coz we cannot predict the future".. well, everything is a high risk then since most people imo cannot do that :) Stocks can be no less risky than options - when the company goes bust shareholders oftentimes lose 100% of their investment. But with options people can fine-tune their exposure and risk profile. For example, owning stocks and reasonably OTM puts would mitigate the investor's exposure to that particular company.
I find your concerns about options trading reasonable though, especially after the Robinhood experience. Just like you said RH doesn't provide any meaningful tools effectively turning options trading in a compulsive gambling. The way how they treated their clients (in fact not clients but an inventory, MM are their real customers) leaves much to be desired, and yes, retail options traders should have an SLA in place with their broker unless they don't mind being an inventory.
Hi Gary, I agree with your point. Thanks to Robinhood other brokerages were forced to drop their commissions. My point is that situation could be improved.. moreover, in many countries the PFOF practice is banned
Thanks for your response. I’m mostly reacting to the headline but appreciate you bringing awareness to PFOF. Are there any PFOF-free options you would recommend?
heard mostly positive feedback on them, it's a shame though tastyworks don't disclose their execution quality and price improvement for the end-user like Fidelity and Charles Schwab do.. even robinhood does that.
the other concern about Tastyworks is that they have been recently acquired by IG Group (UK CFD provider) and might get greedy with the price improvement suffering. IG's poor fill quality is their modus operandi in the UK..
