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.
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.
> 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.
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.
Yeah but I mean if you need to hedge fucking 5 delta deeeeep otm options, you don't need that much stock buying to get your book theoretically delta neutral. I know short gamma markets are a real occurrence on the dealer end, but that happens from institutional money. No one retail is going to be able to move this stuff (unless it's Warren buffett going in big on derivatives for some funny reason).
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 to "exercise" an option and buy their promised stock at the promised price.
Options dealers are automatically "short" all of the contracts they sell, because that's literally the definition of "shorting" -- selling something you don't own. Options dealers technically do not own the stock they're promising to sell to the buyer, but will have to once the buyer "exercises" the options contract.
Delta is basically the difference in velocity of the price of the options contract vs. the price of the stock it's representing. So, if the option is selling for $10, and has a delta of 1 (100%), then a $5 increase in the stock price will increase the option contracts price by $5 to $15. If the delta is 0 (0%), the price of the contract will not change.
Actually, I was wrong. The GP was correct to use the vocabulary he did -- because what I wrote isn't even the full explanation I was planning. However, three paragraphs in, I realized it would take much more to completely explain it.
Basically, options dealers hedge by buying the stock they issue options contracts for, and this can cause the price to move up.
> It's a bunch of mumbo jumbo from someone that takes the academic side of finance too seriously (LTCM anyone?).
Because they used standard, well-defined terms from that particular field? "Gamma" is further from mumbo-jumbo than 90% of computer programming vocabulary - it has a clear definition and everyone in the field understands exactly the same thing by it.
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 may be a bit confused...a short sale of options is not determined based on one's position in the underlying; you can be short an option and long the stock at the same time (for example, an overwrite is a sale of upside calls by someone who is already long the stock).
Delta is the first-order change of the option contract value, with respect to a unit change in the underlying price. I wouldn't refer to it at "velocity" because while I understand what you are intending to communicate (it is a rate), there is another options Greek called "speed," which is the change in gamma with respect to the underlying price. Wikipedia has a really nice description of the various options Greeks. For the truly curious, Sheldon Natenberg wrote a nice book called "Options Volatility and Pricing" that explains the Greeks better than I or Wikipedia can.
Options dealers who are short gamma will hedge by buying stock as it goes up, and selling stock as it goes down. Their demand for (or supply of) the underlying stock will impact the underlying price in a way that pushes the price in whatever direction it has already started to move.
In defense of my word choice: theory and practice are not mutually exclusive. If you want to be excellent at something, you should aim to learn both. BTW I have never taken an academic course on options or finance.
A comment I'm sure you expected you'd get on this forum: you're gonna have to elaborate a bit on/defend a bit that opening line there about being one of the best options traders in the world.
Oh yeah the explanation was much better, but this is one of those cases where the claim of being the best options trader makes the explanation less credible than if they hadn't opened with that and ended with "i've never taken a course" etc. Without it, they're citing the book and wikipedia, but with those statements, they're citing their own expertise and raising questions over their judgement on what sources they are drawing from.
I don't think that would merit the title - when you're talking about small niche situations it's harder to make the case that fantastic results are a result of skill versus luck + selection bias, and even if it's skill then you're not one of the best options traders, you are one of the best traders in that niche.
> someone that takes the academic side of finance too seriously
You know, that's totally fine with me. It's good to have those people around. As I learn more I'll be able to decide for myself what I think of that perspective. Your side is great too.
If you’re interested in learning more about finance, I recommend subscribing to Money Stuff (free daily finance newsletter). Matt Levine does a great job of explaining concepts like these to a layperson and I love his sense of humor.
Thank you for the recommendation. I'm already pretty deep in to a lot of economics and finance newsletters and podcasts. I am also familiar with Matt's work, though not a direct follower. I hear great things though!
> 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.
In Sweden someone was convicted for triggering such bots to do stupid things. Morale: if you are big player, you file a lawsuit. If you are a small player, you get convicted.
There is no way Wall Street is using trades by retail traders as a signal (except maybe to counter-trade them). Also btw Wall Street can easily differentiate trades made by big players versus hordes of retail traders, because the banks and HFT firms are who executes the trades from retail brokerages. Retail brokerages like Robinhood don't have the authority to execute trades. They subcontract to a HFT firm who then uses the order flow to seek alpha (i.e., countertrade and run circles around clueless retail traders).
> 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 ever shows up on the internet. They rent satellites to count how many trucks leave factories. They have access to person-to-person dark pool trades that never show up on the normal exchanges.
Algorithmic trading is a secretive black box, but who knows. These are just my speculations from hearsay and random research. If they can make a fraction of a cent from messing with you, they will. It can scale up infinitely. It's just software--there's no marginal cost to do so, provided they are properly hedged.
> 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.
You contradicted your sentences. I do know Robinhood gives zero commission trades by selling order flow data to hft and market making hedge funds but I don't think those funds execute the orders themselves. The orders still go to brokerages I think (may be wrong about this) or just hit Prime Services from non hft hedge fund books.
Either way, those hft firms definitely like retail order flow data. My guess is they're easier to "pick nickels in front of steamroller" kinda trades than institutional money which may cause extended one way moves that hits high frequency balanced traders adversely.
I'm also entirely talking out of my ass in the last paragraph. I don't actually know that any of what I said is true. Just speculation.
> selling order flow data to hft and market making hedge funds but I don't think those funds execute the orders themselves
The order flow data is worthless (because the orders come from uninformed traders) the value is in filling them without the risk of being shortchanged (because the orders come from uninformed traders).
1) order flow data is not useless because it comes from uninformed traders. It depends on the model being used. Most hft models aren't even concerned about the inflow of big trades from institutional money. Most of their models are simple short period time series forecasts they trade around. Which means the model is pretty agnostic on where the trades come from as long as enough back tests show that their predictive power is good enough.
2) even if that were not true, hft works on volumes. So I contradict my previous speculative comment by saying this but volumes of institutional flows absolutely dwarves retail flows. You'd have much more opportunities trading around institutional money than retail money.
Surely the order flow is mostly going to look like noise, random. But things like local information and employee information would provide some signal - correlated trading patterns - that indicates there could be some information available to inform a trade. Allowing one to either trade on the meta-signal or seek the information behind it (and then trade).
So if you've got a company and the city in which it's headquartered just gets a strong buy signal, sure that could be random but I'd imagine ...
Surely having the meta-data on who is trading and linking that to trades is the primary benefit?
I would hope that spying on trades of employees of specific companies would be illegal, but it would not surprise me if Wall Street does use that information.
it isn't illegal and you can do it yourself, there are websites that show in (near) real-time interesting moves by employees/directors of companies liquidating or acquiring shares in their company.
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
Their right hand side doesn't mention it, so I'm intrigued whether this sub-reddit pre-dates Language Log naming almost this same type of mistake an eggcorn?
Specifically an eggcorn involves an erroneous analysis, in the name example a person figures an acorn does look rather like an egg and so maybe that's why the name for it is "eggcorn". Likewise "tow the line" mistakes the metaphor as involving pulling a rope rather than standing against a chalk mark ("toe the line") and "free reign" assumes it's about some analogy to absolute power of kings rather than controlling horses.
AFAICT the overwhelming majority of posters on WSB are basically burning money. Make enough bad trades and eventually one will accidentally make a bunch of money, but it's definitely not the norm.
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.
This sounds like the plot to an old comedy film, just with new technology. Like some schmuck somehow gets into a fancy Wall Street party and everyone he talks to assume his idiot ramblings are genius financial advice.
Most (theoretically all) automated trading is going through some sort of risk checking software to prevent it from doing just that. The broker dealers are only allowed by regulation (enacted after the flash crash) to allow the algorithm guys to respond so aggressively (the limit is usually an internally set one but you gotta be within it or the feds get on your case) to changes in the market.
> 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.
Not an expert but I'd be surprised if one trade like that triggered anything, could easily be a hedge.
A lot of automated trading is arbitrage and market making, where such a trade would not really be an issue.
Regardless, option trading tends to have human traders behind the wheel, and they're trained to figure out what's going on (trading options is similar to playing poker).
A reasonably sized trade of wing options (far-OTM calls or puts) should be expected to move the volatility implied in the prices of options at and around that strike. I would call this "vol impact" or "skew impact." Go buy 5k AAPL Jul 250P tomorrow morning, and see what happens to the implied volatility of the offer on that contract by the time the market closes that same day.
Market makers are sensitive to wing trades, precisely because pricing skew is more of an art than a science. Trading away from spot can have a substantial impact on the way the implied volatility surface looks. And this can affect trades of other maturities and strikes.
Trading options, for me, is nothing like playing poker. Poker doesn't have an underlying storyline the way companies do. Nor are there catalyst dates in poker.
5k contracts is a massive trade my dude. At a multiplier of 100, that's a notional volume of 500k shares. That ought to move anything. Even AAPL as market makers balance their books. But I mean, generally these are one leg of a 4 leg option trade strategy. So it won't actually be a big net notional exposure in most cases (apart from having trades on the underlying to hedge themselves out).
It can make a big visible bump in a volatility surface, but experienced option traders are trained not to react like robots, but think instead of following blindly (otherwise it would be very easy to fool them, since it's a relatively illiquid market in which anyone can have a lot of leverage).
In that sense it's similar to poker; you don't have all the information to analyze what other players do. In this particular case, is it an informed trader or a noise trader?
I don't see how the weird corollary the comic mentions could work. if you were to pick stocks that consistently underperform the market and someone used your choices as a metric of what NOT to pick (with the idea of thus outperforming the market with their choices) they'd be much more likely to simply pick a majority of mediocre to average stocks instead of special winners, since the selection of stagnant or only modestly growing stocks is much bigger than either the selection of underperformers or major growth choices.
While amusing as hell, the answer to the question posed by that XKCD is 'yes'. It's trivial to give away arbitrage opportunities, so the average expected loss – especially net of transaction fees – can be substantial.
That can't be done just by buying shares at market price, right? Would require some combination of options or short sells. Or setting stops on a highly volatile stock in a way that basically guarantees you lose money.
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?
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.
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.
As I understand it, this is effectively what CFDs (Contracts For Difference) are, which seem to be offered by a lot of discount brokerages etc. (at least here in UK, not sure if CFDs exist in US)
A bet between trader & brokerage that the price will move a particular direction, with no actual trading or stock ownership occurring
The Kelly criterion provides the optimum bet size given the chance of winning. The adversarial brokerage could use the Kelly criterion and only make a wager commensurate with the likelihood of the trader's failure. It should be profitable. Suppose the brokerage just puts 5% of their cash toward this. It could be a nice profit center without risking everything.
"Automated trading systems will probably raise alerts on that stock since someone must know something for that to happen."
Unlikely. Automatic trading systems will not see their trades. Most (if not all) of WSB trades are done through the Robinhood app. Robinhood users are not charged transaction fees executing their trades, they can do this because they sell their flow (these orders) to HFT firms. HFT firms are willing to pay for Robinhood's flow (trades) because the average user is not an insider, has no idea what he's doing and is most likely gambling. If you're an HFT you'd rather trade with a common person, then an informed investor because maybe they know something you don't.
So you start by saying automatic systems won't see their trades and finish by saying automatic trading systems are in fact seeing their trades and playing against them?
>Most (if not all) of WSB trades are done through the Robinhood app. Robinhood users are not charged transaction fees executing their trades, they can do this because they sell their flow (these orders) to HFT firms.
Doesn't this make it more likely, rather than less likely, that HFT algos are affected by WSB madness?
I'm guessing that they are implying that the HFTs already know that these trades came from robinhood (because of order flow feed) , and therefore would discount them heavily on having inside knowledge.
Pair that with poor price discovery: few actively managed funds; shit-ton of indexation (both explicit and closet). We may, and I repeat - may, see some interesting action here. Legends like Michale Burry or David Einhorn often complain about price discovery. Which is even more strange given the fact that the number of publicly traded companies in the US was cut down in half since 1996.
The standard story is about delta hedging (i.e. the buyers are speculators that don't delta hedge, but the sellers do hedge, introducing a lot of gamma into the market, thereby amplifying moves).
My larger point is that in this state of the market one really has to wonder who's ultimately setting the prices.
As Matt correctly points out ppl who work in finance like me cannot look away from wsb. Everyone follows the garbage fire, so it's actually kinda real!
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 almost exclusively, and really the only way you can 10x-100x your money in a few months (or in less time).
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.
FYI for anyone else who didn't know what "bears and bulls and thetas" means (skip the top answer, or better yet come back to it after reading later ones):
Easier just to spell it out right here. Bear gang wants the market to die, Bull gang wants the market to moon (go up) and theta gang wants the market to not move at all.
P.S: Stonks only go up! ... I mean down (as of late).
> there's no where near enough volume there to move anything
I was imagining that some big money quant fund had written bots and scrapers to use r/wsb as an algorithmic amplifier since over time they can make money on tiny shifts. Or maybe that would just make a good movie plot.
You're definitely not the first to think of this. I know of a couple of people have done sentiment analysis on r/wsb over the years. I've thought about doing it myself. But, doubt it'd be worth much other than a fun exercise.
Matt Levine has an interesting take in his email newsletter that refutes your claim. Basically, by so many people buying calls, it forces market movers to purchase the underlying stock to cover their call and this perpetuates an upward movement.
That's the opposite of what he said. Look at his latest article:
> We have discussed this theory before, during Tesla’s wild rally, and I conceded that they’ve got a point. Not a perpetual motion machine, but a motion machine, sure. The machine runs on leverage. If you have $100, you can buy $100 worth of stock, and the stock will go up a little; your trade will be self-reinforcing. If you get a margin loan, you can buy $200 worth of stock, and the stock will go up a bit more; your trade will be a bit more self-reinforcing. On the other hand if the stock then goes down a bit, your broker might call more margin from you, and if you can’t put up more money the broker will liquidate your whole position and the stock will go down. Trading on margin magnifies swings
Or what he originally wrote:
> the call options should have a volatility-increasing effect: Dealers who sell call options have to buy stock to hedge, and they have to buy more stock to adjust their hedge as the stock goes up (and sell as it goes down), meaning that speculators who buy Tesla call options to bet on the price and volatility going up also to some extent cause that to happen. To some extent! “LOL BLOOMBERG ADMITTING THAT AS LONG AS WE BUY THE CALLS THE STOCKS WILL GO UP BECAUSE OF HEDGING ALGORITHMS,” was Reddit’s takeaway from Kawa’s article, and I would not personally go that far.
How do you get from Matt Levine saying "this cannot perpetuate an upward movement" and "other people are taking this to mean that the stocks will keep going up as long as we keep buying the calls, but those people are wrong" to "Matt Levine says this perpetuates an upward movement"? He made a direct, first-person statement of what he thinks, and you've inverted it.
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 on it.
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 interpreted differently. But I don’t know for sure, because I don’t study such things and hardly know options or markets. Neither does like 98% of the folks on this post based on their comments here (yourself included!)
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.
It is worth noting that a user was recently banned for pumping a penny stock. Additionally, it seems within the realm of possibility that powerful people could use a shitposting forum to signal each other for market movements.
It depends entirely on the security. Sometimes users will pick far out of the money strike with little volume and be the entire market for that day, but major stocks like AMZN have such deep option pools and liquidity that even the entire sub buying the same thing would be insignificant.
Options are derivatives of the security so any influence on share price will be a very diluted reaction based on risk and general market sentiment which I don't think a few thousand users are capable of. They would need to carry serious notional volume (in the 9+ figures) or major hedging risk with their brokers for any price action to occur, and even that might not last beyond days or hours.
I disagree and I think your "come on man" comment is ignorant, as though a journalist did not put in effort on the article you so blithely dismiss. On top of that your lack of insight or significant analysis is stunning for a comment with 100+ upvotes. And no, I'm not on Reddit. As you offered nothing but your opinion I'll leave this as mine.
I imagine there's a few professionals on there (and other places) who will seed interest in / make a meme out of a stock in order to pump vega (or whatever you call "the predictability of the timescale on which volatility of the option becomes less predictable"—meta-vega? The thing in decision-theory that lets you capture utility when only you know that someone is pursuing a true-random mixed strategy, when they haven't actually done anything yet.)
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.
It's one of the option greeks. The original definition is basically the partial derivative of option price wrt time, i.e. it's the amount by which an option would lose in value per unit of time, when all else is equal. It's always negative.
Theta gang just means someone who sells options and expects that option to expire worthless, thereby profiting from the slow decay of option value due to theta. It's a legitimate strategy in the options world for professionals, not just for WSB autists. Here's a random example of a finance professional running this strategy successfully in his personal account: https://earlyretirementnow.com/2019/03/27/passive-income-thr...
Disclaimer: I don't know this person, nor do I recommend copying his strategy if you don't know the options greeks; actually the amount of money you would need to execute his strategy would probably make most options beginner uncomfortable anyways.
It means he doesn't have the entire notional amount of an option to cover the short put.
For example, if you want to sell an SPX put at $3000 strike, then the notional value of that trade is $300k. He doesn't have $300k in the account for that one trade though. If you want a leverage factor of 2x, then for $300k in the account you'd trade two such options, each having a margin equity of $150k. Since you're trading two options, the profit and loss are both enlarged by 2x. The worst case scenario is that if SPX drops by 50% and he doesn't take any action before that, he'd have no money left.
The author mentioned that he uses a leverage of 2x to 3x. That means you need $100k to $150k in the account to trade a single contract. Hardly for beginners.
Options are contracts that let you buy or sell shares at a certain price up until a certain date in the future where they expire. These contracts slowly lose value up to that date (outside of moves in stock price that make the contract worth more or less in the meantime).
Some people sell these contracts on the probability that they will expire worthless and they keep all the money that someone else paid for them.
If they can influence the conversation then they can impact the price movement- the volume comes from institutional investors that get spooked by calls on meme stocks relative to normal stocks, then their algos (which aren't trained to handle meme stock banter) go nuts. That's just my theory though.
Outside of institutional traders who can individually move large volumes of stock it's all herd mentality. Where the algos have the advantage is they see the herd moving either way earlier and react quicker.
On a naive level you could just think of the Reddit group simply spooking the herd to start going in a certain way. All fun and games.
In reality it's likely the same few individuals doing the triggering making it an effective pump and dump scheme. Someone has to lose out when stocks move with no underlying justification.
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.
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.
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.
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/<20 or fewer characters>" 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.
I'm going to guess, based on what I know about diversity and inclusion.
It's the fact that people are called retards, autists, and homophobic slurs. To some it's about "having thick skin". To others it's about normalizing "hate speech".
It really depends on what your life experience is to determine which camp you fall in. If you've been on the receiving end of hate speech or discrimination, you tend to be in the second camp. If you've lived a relatively privileged life in terms of 'fitting in' to the world around you, you tend to think people just need to grow thicker skin.
And this disagreement between those two groups sums up like 95% of all social media posts right now.
> If you've been on the receiving end of hate speech or discrimination, you tend to be in the second camp. If you've lived a relatively privileged life in terms of 'fitting in' to the world around you, you tend to think people just need to grow thicker skin.
As someone who fell into category 1 for most of my childhood, I think you have the labels reversed. I think it takes a tremendously sheltered privileged life to get offended by such weak words, especially when they're clearly in jest. Thick skin comes from being exposed to the realities of the world and having an idea of the magnitude and context of e.g. those memes compared to actual hate speech such as I experienced.
It's not a case of 'people who never experienced hate speech think its ok', it's a case of 'people who experienced real hate speech can differentiate it from crude jokes and shitposts'
If anyone remembers Jay Austin and Lauren Geoghegan, the American couple who went to Tajikistan and started video blogging to show that 'all humans are kind' and promptly got murdered by ISIS because they had no idea how dangerous the country was? That's the kind of sheltered privileged demographic that gets offended by shitposting. They have no clue what actual hate or actual danger looks like.
Political correctness and victim culture are pretty unique to the wealthier segments of the West and Europe.
The internet has generated this weird subculture of people who get really really upset at people making jokes. It has a "think of the children" sort of moral panic vibe to it. A lot of it has to do with completely ignoring any context or intention from the source material, which isn't how language works in any other context. Jokes inherently use exaggeration and extreme positions in jest which make them easy targets for misrepresentation.
The even weirder thing is it's finding a reception among weak-willed administrators at various institutions who capitulate under the slightest provocation from these small groups of highly vocal outage mobs (largely because these groups have gotten really good at stirring up controversy, and the low-budget modern internet media is perpetually looking for controversy, legitimate or not).
But if you did a survey of the general population (or the institution's actual customers) instead of just listening to these small mobs you'd find that it really isn't that big of a deal to the vast majority of people. The average person understands context and intent - assuming they heard the original source, not the filtered down unfunny reinterpretations that make the rounds.
I was listening to a "best of Jeff Ross" on Youtube recently and all I could think of was that if any of his stuff had been filtered through these cancel culture people over the last few decades he'd basically be considered the devil instead of one of the funniest people in comedy.
I fear for the future of culture, especially comedy, which thrives in a sort of experimental unfiltered chaos. Maybe it will have to live on in the underground like Samizdat in the Soviet Union.
At what point does criticizing political correctness become as irritating and worthy of shunning as PC scolding itself? Because it's getting to a point where discussions are choked with anti-PC admonishments for every PC statement. It takes two to tangle, after all. Or two to go to culture war.
To be fair in this exchange, the initiating comment was very much a 'pro-PC' statement. The comment got flagged away but it was some strong wording along the lines of "being okay with any politically-incorrect stuff is 'disgusting'". IIRC disagreements and discussions are allowed/encouraged on HN.
We've always had assholes who take things too far in society (Cosmo from Seinfeld/Michael Richards) was one of the first examples. He hasn't had work since and essentially committed social suicide as a response - which I think is becoming the new standard punishment and one that is way out of whack with who we are as humans. We give the appropriate social reaction, but I feel like it goes too far. People make mistakes, they always have.
But we're going through history with a fine-tuned brush and destroying anyone who doesn't fit into our modern conception of socially acceptable.
It'd be dumb to say the PC crowd is always getting it wrong. They do get it right often, but the pitchfork mob career/life ending response is where I part ways.
Where I differ, and I wish more people took a more rational approach to it, is that we're all flawed humans moving through a fucked up world. And we're unfairly destroying manu great minds and contributors in the process using some idealistic and unrealistic standard that none of us will ever achiever.
The end result is that the only people we allow to be leaders are milquetoast, authority-loving, angels who've never experimented in their lives.
This kind of this destroys culture. And the solution is to stop taking these small highly vocal mobs so serious and look at what they are. New idealistic well-intentioned Puritans 2.0.
We need to embrace the chaos and let people get offended again, and move on with our lives, because it really isn't that bad. It's not the way we reach progress.
If you want progress them embrace experimentation of all kinds, not some overton window with an ever growing list of things that are not okay. Or reevaluating the great people in history as if they grew up in the 1990s/early 2000s.
History is littered with mistakes but it's also full of great moments and experimentation and progress. The more we shut down this chaos every time we get offended the less great culture we'll get out of it.
If in the 1700s+ free speech had a clause where no one can get offended ever we'd live in the most boring and backwards world imaginable. The pseudo-progressives are attacking the very freedoms that allows progress to exist. And we need people will balls again to set up and push back. Because we aren't getting it from our university administrators trying to protector their jobs or from corporate pro-diversity divisions that are trying to keep up with culture, so you keep buy their products.
Top-down control of what is and what is not okay from culture is not that solution, period. Not doing that has allowed culture to flourish in the free democratic western states for decades and we're moving backwards, always with the best intentions, but too quickly to realize the side-effects and massive downsides of doing so.
Every society has different mores and customs, traditions shift over time, and a lot of hand-wringing over PC ends up as tiresome as those who would militantly push PC, cluttering up discussions that have little to nothing to do with these cultural squabbles.
The people campaigning against the use of those words are usually from the category affected, plus a few thought leaders outside the category who say "maybe we shouldn't be so nasty towards the outsiders". It's the ones outside the category who everyone attacks as "politically correct", because of the unthinkableness of advocating for something that doesn't personally benefit them. The ones inside the denigrated category are usually invisible.
And that's why you do see people campaigning against hate speech outside of the West and Europe - but much more quietly and less visibly, partly because they're not amplified and partly because (as you've noticed) it's genuinely dangerous for them to do so.
There's a Pride in Uganda. It's illegal. You won't find people telling you not to use "f-g" there, because they don't have the power to say so safely.
You hit the nail RIGHT on the head!!! Only privileged suburbanites care about this type of stuff, because they don’t have any real problems to worry about.
If you ever visit any of Asian country, you're in for a bit of a culture shock if you're expecting to see the kind of political correctness that you edited out from this comment earlier.
The top 5 Asian countries by size are Russia, China, India, Kazakhstan, Saudi Arabia. None of them have correctness, in fact all of them are anti-PC and see it as a weakness, especially in China and Russia where westerners are viewed as thin-skinned and weak minded due to PC culture. And in 3 of them people will either express real hate speech or outright violence towards homosexuals.
Your flowery ideals about the world around you are proving the point I was making.
I think he might have meant "political correctness" less in the sense of "extreme sensitivity about denigrating homosexuals" and more in the sense of "arbitrary rules of social etiquette that people get extremely upset at you for violating".
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 world's population.
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.
Exactly; but Missosoup has strongly internalized the idea that neither blacks nor queers deserve respect; as such he truly doesn’t understand why calling them derogatory terms is a bad thing.
To him, it’s insane that a white person could care about a non-white; or a straight could care about a queer. He thinks that’s fake.
It’s sad, but it’s a peek inside the mind of a shitty human being who had abhorrent parents.
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.
In none of the situations I mentioned are people acting protectively towards an in-group, but rather towards a particular revered individual. Social norms and taboos are much more complicated than that.
How does that narrative apply to the example we are discussing in this thread - r/wallstreetbets?
All the objectionable language used there is self-applied. The members of that community call themselves gay, autist, etc. Are they trying to persecute themselves, and evading social standards by calling it comedy?
>It really depends on what your life experience is to determine which camp you fall in. If you've been on the receiving end of hate speech or discrimination, you tend to be in the second camp. If you've lived a relatively privileged life in terms of 'fitting in' to the world around you, you tend to think people just need to grow thicker skin.
In my opinion this is backwards. You can have people who lived an extremely privileged life, they never experienced that many hardships at all, and so when they see someone being called anything that could be slightly offensive they overreact in defense of the other person, because if they were insulted in a similar manner they would really feel it strongly.
Similarly, you can have people who receive a lot of hate and don't fit in, grow a thicker skin because of it, and then tells others that they should do the same because it worked for them. Those people might have some combination of personality traits that allowed them to grow a thicker skin in the first place, so their advice will work for some people but not others.
From my life experience these two modes happen much more often than the ones you described.
People can get offended at one term or terms and be blind to the fact that they use others that are offensive to different people.
It happens all the time that you use a slur casually and don't realize it applies to someone next to you. If a person is conscious of that happening daily where it's not socially acceptable to say anything, then they may internalize that this is normal and expect others to also have a "thick skin".
r/wallstreetbets is not politically correct. It is shitposting of a magnitude not seen since the heyday of 4chan. (Their motto is "if 4chan got a bloomberg terminal")
In other words, he's upset because people put mean words on an imageboard.
ikr, and honestly, I mean, at least compared to what i've seen in some other places on reddit, wallstreetbets is pretty tame, still politically incorrect, but the worst ive seen is them calling both themselves and others "gay bears" and "autists". ive definitely seen far worse and more mean-spirited elsewhere
agree. wsb has some racy language but it is all in good spirits. It is not at all like all the cesspool subreddits where everybody is a mean spirited asshole.
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.
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
You'd be surprised what you can get out of short Reddit comments if they're posting in multiple subs for long enough, see https://redditmetis.com/ for example.
> 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.
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.
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 nothing.
I had a lovely strategy of signing up with the stock promoters of Vancouver and South Florida and trying to short all of it. Worked nicely until someone published a paper on returns of spam stocks, at which point it died instantly.
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.)
I love your concept. A few pointers from a digital marketing perspective:
1- Upon sign up, the confirmation email says: For questions about this list, please contact: coand@gmail.com - I'd suggest you use the @topstonks.com address - it really looks more professional.
2- The page focuses too much on the features and not the benefit. I think people are less interested in 'data' 'analysis' and seeing a sample and more on what's in it for them. Maybe run a regression analysis and tout the benefits. If most of the stocks tank, then tout how you can fade the public, or if they tend to go up, again, mention that.
3- Why is it beta? What's beta about it? It's OK to mention it's in beta, but then you need to make it clear what's the long term vision or why you say beta. Personally, I'd get rid of that part.
In any case, this is an excellent idea that could easily branch out in a lot of directions. I'm subscribed and will look forward to seeing what you develop this into. :)
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.
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.
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.
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.)
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.
> 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
> 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!
- Even if you are in the US, there is still some liability risk of EU recipients. Not super clear, but better safe than sorry.
- Double Opt-in can improve email deliverability. Clutter folders are starting to detect and filter out emails with low engagements. An opt in email forces an engagement, and weeds out bad recipients.
Well, sort of. It is the EU's opinion that those laws apply globally, even if they don't have a way to enforce them. Sometimes governments cooperate in helping each other enforce laws in each other's jurisdictions and sometimes they don't.
> You may be wondering how the European Union will enforce a law in territory it does not control. The fact is, foreign governments help other countries enforce their laws through mutual assistance treaties and other mechanisms all the time. GDPR Article 50 addresses this question directly. So far, the EU’s reach has not been tested, but no doubt data protection authorities are exploring their options on a case-by-case basis.
> 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.
They detect your private mode using JavaScript; you can bypass by pausing script execution with the developer console immediately after the article loads.
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!"
Baitblock has tracking resistance that also deletes first party cookies/other tracking mechanisms when it detects that you're not logged into a website.
Some sites have been getting smart and not doing the paywall logic client side, and will not send the entire article's text over HTTPS which allows archive.is to save it and reader mode to function. I think Longform also did this at some point.
I don't think it's about throwing away privacy for readers using reader mode, it's a matter of wanting to be compensated through the subscription model. Between the two, getting compensated won out.
This userscript fixes that. Same protection is used in several other mainstream media websites. I have found one website which is broken by this userscript though, so I don't recommend using it with wildcard for all websites instead of the few which use this protection.
It's not, but that's the one big problem (IMHO) with GDPR: that it doesn't allow individuals to sue.
If I want to force them to either fall in line with the GDPR or get out of Europe, I need to find my local responsible agency, send them an email, and pray that they have the will and resources to act on it.
It does allow individuals to sue, and our right to justice is set out in article 79. It allows you to bring a suit to court in your (European) country of residence. You can sue for compensation for immaterial or material damages as set out in article 82. You should/might be able to sue for other things as well, such as forcing a company to delete data or provide you with a copy of data under processing. In Sweden there is case law where a claimant has received compensation for damages. So at least in Sweden court can be expected to award compensation when the case merits it.
I have myself brought two cases to court in Sweden, but settled before verdict. The reason I was able to settle is the verdict would probably have gone my way.
I agree with you that your local DPA is toothless. There are way to many cases for them to handle, that’s why we need to turn to the courts and not to our DPA to protect our rights.
Lastly, most claims will be small claims, that is, less than 1000 EUR. In small claims you’re only liable for a small portion of lawyers fee should you lose.
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.
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.
> 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.
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 gains. Individuals? huge swings. Many snakes and few ladders. Feels like you got onto a ladder but (if I read this right) also got off on a higher cloud, than you entered.
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 are way overstated, if anything it helps rich URM more than those who are poor) and has been discouraged from pursuing a job in traditional tech given all the bullshit about inclusion and diversity that is spewed while their actions say otherwise, I consider the stock market the great equalizer. The barrier to entry is lower than most tech jobs and the color of your skin or your background doesn't change the potential outcome when a trade is placed, getting a job in the industry is a different story though. I've had a hard time hearing back from quant firms (quant from bb that rhymes with oldman slacks said my cv had too many "red flags" to be considered). When talking to universities about grad school, they really didn't give a shit that I was a URM like a lot of people will have you believe, they just wanted money. This bought me time to pursue independent study, where I've been teaching myself stochastic calc, math behind ML, additional programming in hopes of landing a jr quant role where performance is more objective with less layers of abstraction when it comes to value provided, people don't really care how you look if you you can point directly at how much money you made them. So given that most my life has been inherently -ev, I'm not going to lie it feels great for a change and I plan to run with this. Given where I grew up, dog eat dog is what I know, I thrive under pressure and stay rational in chaos, growing up I've had to hyper-analyze situations to anticipate any worst case scenarios that might occur and gtfo before shots are fired. I guess if I were a character from Peanuts, I'd be Pig-pen.
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)
While it's mostly for jokes, it's also hit r/all enough times and has enough subs that if the sub jumps on a particular meme stock, they are enough to actually make it move.
So, it's somewhat ironically become a way to coordinate purchase/selling of a stock by getting enough of the hivemind to go along with a particular stock.
It's still a terrible place for general advice though.
I mean, there are definitely those who are trying to exploit r/WSB to do that I'm sure.
But at the same time, it's not like there's defacto leaders. It's more once the zeitgeist takes hold mobs of people will, for whatever reason, follow along.
I'm sure there are a lot of very smart people trying to figure out how to weaponize this and have their positions locked in before the mobs move the market and time their exits.
It's mostly what you said but as the sub got more popular, a lot of people started treating it as sage advice to get rich quickly without understanding what they were doing.
There were a few posts by people pumping their stocks and the like but I think the current market correcrion/recession bell tolling will scare most people off
It definitely is mostly memes, but if you're a momentum trader...it's probably not a bad sub to follow for ideas. It can also act as an inverse indicator when everyone starts showing massive gains. I wouldn't be surprised if some hedge funds or algos monitor the sub.
Even if they don't take it too seriously, I'm sure people pick up ideas there. If you see people talking about buying Tesla options every day, you'll probably consider it far more than you would otherwise.
You'd think that the screenshots of horrific losses on robinhood, interspersed throughout would have a moderating effect. That, along with the obviously sarcastic investment advice and general crude language makes anything coming out of there less trustworthy than something like Mad Money on CNBC.
Posting losses gets other people more comfortable with losing, keeping folks interacting with the market longer. If you're Robinhood, you'll benefit either way.
unless you already know what you're doing (ie, not me), it's hard to tell the solid investment advice from intelligent-sounding bs. in general, it serves as a good example of what not to do.
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.
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.
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.
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.
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"
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.
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.
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.
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":
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.
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?
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.
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.
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?
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.
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.
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.
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?
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?
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.
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?
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.
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.
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.
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.
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
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.