[HN Gopher] Reddit's profane, greedy traders are shaking up the ...
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Reddit's profane, greedy traders are shaking up the stock market
Author : hashberry
Score : 131 points
Date : 2020-02-26 14:19 UTC (8 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| gruez wrote:
| 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.
| aaron-santos wrote:
| Yes, that's why you can be sure that data is vacuumed up, and
| fed into a model which can exploit that behavior.
| partiallypro wrote:
| 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.
| Spellman wrote:
| 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.
| ashleyn wrote:
| So...a pump and dump then.
| xxpor wrote:
| Is a pump and dump illegal if everyone's in on the joke
| though?
| bobthepanda wrote:
| Only way to find that out is through precedent.
| gruez wrote:
| I don't think the SEC would buy that excuse. Even on
| thinly traded stocks there's going to be volume from non
| /r/wsb participants.
| Spellman wrote:
| 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.
| outworlder wrote:
| It is exactly that. Sometimes there's actual, solid, investment
| advice hidden in posts. Sometimes.
| rapsey wrote:
| 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.
| [deleted]
| leetcrew wrote:
| 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.
| Infinitesimus wrote:
| 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
| nitwit005 wrote:
| 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.
| gruez wrote:
| 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.
| vsareto wrote:
| 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.
| thisisnico wrote:
| I follow other subreddits like /r/investing /r/personalfinance
| /r/financialindependence that basically send people like this
| to /r/wsb.
| [deleted]
| jobseeker990 wrote:
| Can anyone explain the strategy it's talking about?
| JakeTheAndroid wrote:
| 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 wrote:
| 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.
| traeregan wrote:
| Someone started a cryptocurrency version of WSB recently as well:
| https://www.reddit.com/r/SatoshiStreetBets/
| alexpotato wrote:
| 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.
| bdcravens wrote:
| > Coupled with Lexis Nexis (which was just coming online at the
| time)
|
| Lexis Nexis has been around a lot longer than that. By "online"
| do you mean web accessible?
| alexpotato wrote:
| Correct, web accessible is what I was referring to.
| godelski wrote:
| But was P&D happening?
| endorphone wrote:
| 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.
| jb775 wrote:
| New side-project idea: WSB sentiment analysis tracker linked to
| RobinHood API
| thih9 wrote:
| > 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.
| toohotatopic wrote:
| Why is that behavior in agreement with GDPR? Don't they have to
| provide their information without people having to share
| private data?
| probably_wrong wrote:
| 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.
| danieka wrote:
| 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.
|
| IANAL.
| nonbirithm wrote:
| 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.
| ab_testing wrote:
| Ublock > Disable Javascript > Read the article
| svnpenn wrote:
| I didnt get that, I tried with Firefox 72. Note I am also using
| uBO 1.25.0.
| TACIXAT wrote:
| FF 73 and uBO 1.24.4 I still get it in a private window.
| the_svd_doctor wrote:
| In Firefox, just click on "Reader mode" at the end of the
| address bar.
| rhizome wrote:
| If CNN and WSJ are any indication, and I'm pretty sure they
| are, FF's reader mode is easily defeatable by div'ifying
| everything.
| Brendinooo wrote:
| Firefox's containers make it easier to work around stuff like
| this.
| Hitton wrote:
| https://old.reddit.com/r/Piracy/comments/b8z1li/how_to_get_p...
|
| 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.
| jfengel wrote:
| 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.
| salawat wrote:
| >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!"
| jamil7 wrote:
| Not sure how many here have tried it but it takes all kinds of
| tricks to scrape Bloomberg reliably. Not surprised they're
| doing something like this.
| egdod wrote:
| Just turn off JavaScript.
| jamil7 wrote:
| Huh, you're right. The last time I tried this (year ago)
| they would throw up a "Are you a robot" page.
| Paul-ish wrote:
| I get that page if I turn off JS right now.
| judge2020 wrote:
| Even happening with a second Chrome profile, so it might be
| more heuristic-based than the previous tricks[0].
|
| https://news.ycombinator.com/item?id=20670596
| tylerhou wrote:
| They detect your private mode using JavaScript; you can bypass
| by pausing script execution with the developer console
| immediately after the article loads.
| remote_phone wrote:
| 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.
| CamelCaseName wrote:
| Regarding 1:
|
| r/wsb is essentially the same as r/wallstreetbets. r/wsb just
| exists to avoid others from using it for nefarious purposes.
| You'll notice that the moderators there are largely the same as
| those in r/wallstreetbets.
|
| Everything else you write is fairly accurate. RH has certainly
| skewed r/wallstreetbets' demographic and behavior.
| yhoneycomb wrote:
| "If you have a thick skin" classic hacker news. Never fails to
| disgust me.
| xiaoxiae wrote:
| Care to explain?
| denkmoon wrote:
| 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.
| sarakayakomzin wrote:
| >In other words, he's upset because people put mean words
| on an imageboard.
|
| that's a lot to infer from a single sentence. do you
| offer a better warranty than Best Buy? I'm looking for a
| new projector.
| 0_gravitas wrote:
| 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
| Loughla wrote:
| 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.
| missosoup wrote:
| > 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'
|
| Political correctness and victim culture are pretty
| unique to the wealthier segments of the West and Europe.
| adnzzzzZ wrote:
| >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.
| PragmaticPulp wrote:
| 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.
| neonate wrote:
| https://archive.md/GncCZ
| jborichevskiy wrote:
| Related: r/pennystocks
|
| https://twitter.com/packyM/status/1229910436184756225?s=20
| 52-6F-62 wrote:
| 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
| dang wrote:
| Related column: https://news.ycombinator.com/item?id=22425390
| safog wrote:
| 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.
| creaghpatr wrote:
| 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.
| dwd wrote:
| 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.
| FilterSweep wrote:
| There are also a few hardened investment professionals on there
| who will throw bad picks just to watch the fallout
| vidanay wrote:
| 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.
| peterlk wrote:
| 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.
| 6gvONxR4sf7o wrote:
| 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):
|
| https://www.reddit.com/r/wallstreetbets/comments/ef0xhj/eli5...
| doingmyting wrote:
| 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).
| alpineidyll3 wrote:
| 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!
| nabla9 wrote:
| IMX (TD Ameritrade The Investor Movement Index) tracks retail
| investors sentiments from real portfolio data.
|
| IMX trails what happens in the markets. Retail investors don't
| create trends, they follow them off the cliff.
| H8crilA wrote:
| You haven't looked at the numbers. There's so much option
| trading that it affects the entire market a lot:
|
| https://themarketear.com/posts/cqKGhoO98L/image/0
|
| 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.
| mrandish wrote:
| > 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.
| greenie_beans wrote:
| 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.
| thaumasiotes wrote:
| 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.
| rantwasp wrote:
| hmm... what about MU, AMD, BYND, SHOP. you're not paying
| attention.
|
| imho, robinhood gets the most out of it. the number if issues
| this reddit sub has found with RH is mind-boggling
| cbHXBY1D wrote:
| They've definitely moved MVIS before.
| metalliqaz wrote:
| infinite money!
| rantwasp wrote:
| cannot literally go... sideways
|
| what about box spreads? it's foolproof!
| AnotherGoodName wrote:
| 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.
| pnako wrote:
| 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).
| totalZero wrote:
| 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.
| mixedbit wrote:
| Can they be bad at trading? https://xkcd.com/2270/
| chipperyman573 wrote:
| Wow, I'm not sure if it was intentional but the alt text
| can be interpenetrated to be the same as GP's idea
| ipnon wrote:
| I learned a new word today
| https://www.wordnik.com/words/interpenetrate
| chipperyman573 wrote:
| Hahaha I meant interpret
| rhizome wrote:
| There should be a sniglet for this situation.
| Majromax wrote:
| 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.
| plouffy wrote:
| "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.
| scythe wrote:
| >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?
| vasco wrote:
| 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?
| LiquidSky wrote:
| 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.
| zozbot234 wrote:
| > 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.
| totalZero wrote:
| 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.
| hrdwdmrbl wrote:
| I love finding comments like this where I understand very
| little. (I am not being sarcastic). Excellent for learning.
| 101404 wrote:
| Hm... trading bot trolling.
| dsfyu404ed wrote:
| 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.
| DennisP wrote:
| So your theory is that they're terrible traders, and your
| evidence is that they made huge profits on call options?
| martin_bech wrote:
| Nope his theory is that most trading is algos, and you can
| mess with algos, by doing crazy stuff.
| geneticswag wrote:
| 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
| asavadatti wrote:
| Not trying to be a jerk but the phrase is "Case in
| point".
| reaperducer wrote:
| It's fine, for all intensive purposes.
|
| (This is what happens when a society stops reading
| books.)
| mrandish wrote:
| By in large, you are correct.
| misterprime wrote:
| I really could care less.
| jartelt wrote:
| Similar for "all intensive purposes" vs "all intents and
| purposes"
| henryfjordan wrote:
| A few lucky ones made money on terrible bets. There's no
| way that the posters to that subreddit are breaking even in
| aggregate.
| holychiz wrote:
| 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.
| m3kw9 wrote:
| Usually if you think you are fcking someone in the stock market,
| you are usually the one being fcked
| cityzen wrote:
| 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?
| m3kw9 wrote:
| Wall Street will catch on and come around to set a trap
| razster wrote:
| For those interested in r/WSB's reactions...
| https://www.reddit.com/r/wallstreetbets/comments/f9sx9d/cong...
| bitxbit wrote:
| People dismiss wsb but gambling is a big issue here in the US.
| This is exactly what happened during dotcom.
| cdiamand wrote:
| Hey! I'd like to shamelessly plug my new project here:
|
| https://topstonks.com
|
| We're writing about this speculative culture emanating from WSB
| and 4chan in a daily email. We send out a list of the most
| mentioned stocks, and do a longer form commentary, with quotes
| from those communities a few times a week.
|
| It's just an email now, but we're going to roll out options
| analysis and a few other goodies in the coming weeks :)
|
| (The language can be a bit crude, so this might not be for you,
| if that is a concern.)
| Spellman wrote:
| There's already a vehicle to invest on "buzz" actually.
|
| The BUZZ ETF is traded and invests based on how often
| particular stocks get mentioned in social media and new
| reporting. I'm sure they're monitoring r/WSB as well.
|
| http://buzzindexes.com/
|
| Disclosure, do not hold or have any affiliation with Buzz Index
| products. Just heard about it before.
| cdiamand wrote:
| Cool! We were actually recently talking about how well an ETF
| that inversed WallstreetBets would do.
| anon9001 wrote:
| 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.
| strbean wrote:
| Seems like they are just an index now, with no ETF? All I can
| find for ETFs is "BUZ ceased trading on 03/01/19"[1].
|
| [1] https://www.etf.com/BUZ
| shiftpgdn wrote:
| 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.
| cdiamand wrote:
| Done! Thank you for the tip :D
| hnick wrote:
| I guess the US tobacco company that sends me emails with a
| helpful footer "You are receiving this message because you
| consented" took your advice.
|
| I could be a minor and they wouldn't have a clue.
| legitster wrote:
| This is bad advice:
|
| - 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.
|
| - It's a better all-around experience.
| jaywalk wrote:
| If you don't have a presence in the EU, there is zero
| liability regarding EU recipients. EU laws do not apply
| outside of the EU.
|
| That being said, double opt-in is still a good idea
| regardless of the law.
| dnr wrote:
| 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 wrote:
| Thanks for the heads up. Reenabled!
| jcrites wrote:
| 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.
| foogazi wrote:
| As a recipient of emails intended for other people this
| is exactly how I wish it worked
| aaron695 wrote:
| > 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
| Exuma wrote:
| Yes people are "greedy" who trade stocks. GTFO of here with that
| hype shit.
| throwaway3157 wrote:
| 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 wrote:
| 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...
| sgreenlay wrote:
| http://link.mail.bloombergbusiness.com/join/4wm/moneystuff-s...
| Traster wrote:
| 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"
| OJFord wrote:
| Matt Levine's take:
| https://www.bloomberg.com/news/newsletters/2020-02-26/money-...
|
| 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.
| AdmiralAsshat wrote:
| A very prescient XKCD (which as afar as I can tell, was released
| before the article was published):
|
| https://xkcd.com/2270/
| zpwe wrote:
| 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.
| TheRealPomax wrote:
| 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.
| ra5 wrote:
| 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.
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