7/18/2023 0 Comments Quiver quantitative wallstreetbets![]() Financial Timesīut the political element has become hard to ignore. The GameStop rally relied on mass purchases of call options that trigger well above the stock’s prevailing rate, to help gin up the share price. One WSB member who jumped on the GameStop trade said he did it mostly for fun, with no thought to the investment thesis laid out by DeepF-ingValue or any political statement. “The only way I want to occupy Wall St is in a suit myself or rent-free in the mind of a blown-up short,” they wrote. ![]() One moderator lamented on Wednesday that there was “too much political bullshit in a community that was never ever political”. WallStreetBets did not begin with the disdain for elite institutions that it displays today. That is why you are seeing such seismic shifts in price.” ‘Us against the world’ “The impetus might have been the Reddit community and the retail community coming together in unison, but we are also seeing momentum trading kick in. “There is no question that there is institutional flow,” one derivatives trader on Wall Street said. Professional hedge funds and derivatives traders are now examining these message boards for tips and sometimes jumping on to the Redditors’ wagers. He did not reply to requests for comment. The user’s screenshots of a trading account show it had more than $US33 million in it, including shares, options and cash – a claim that could not be verified. The strategy, which later spread to other generally unloved companies, offered a tantalising return for day traders like DFV. But within that you have people who are actively engaging with this as a form of active financial liberation.” “Reddit is already this carnivalesque space. Redditors approach the community like a game, with suspicion of established systems, bravado and irreverent humour, according to Adrienne Massanari, associate professor at the University of Illinois. Jargon includes talk of “diamond hands” – an ability to hold a position despite the pain – and “tendies” (trading gains, but also an abbreviation for chicken tenders – a meal considered fit for a king). The channel is also replete with slurs against LGBTQI people. The conversation, mostly among anonymous nickname accounts, is littered with profanities, insults and a self-deprecating tone. “This is the way” – a phrase borrowed from Disney’s The Mandalorian – is the mantra repeated on the forum, a creed posted alongside claims of trading gains, charts and rallying calls to buy stocks such as Nokia and BlackBerry. Redditors discussed tactics such as calling up their brokers and telling them not to loan their shares to short sellers, and built strategies around how the GameStop share price would react when hedge funds were forced to close out their negative bets. “People are well aware of the market mechanisms that could cause the price to spike.” ![]() “These Reddit traders are not renowned for being professional investors, but there is pretty deep-level analysis on this forum,” said James Kardatzke, co-founder of Quiver Quantitative, an alternative data provider that scrapes online forums for data. His success was emulated by so many other have-a-go traders that it crashed online brokerages such as Robinhood, and became a talking point in the White House and on Capitol Hill. His windfall is the flip side of a humiliating episode for several supposedly canny hedge funds that have suffered losses large enough, in some cases, to force them into rescue packages. He subsequently dived back in and said he is willing to lose the rest. The rally sent the value of his TD Ameritrade account soaring from $US4000 ($5235) two weeks ago to $US124,000 on Thursday (Friday AEDT), before he cashed $US20,000 out. Bloombergīut spurred on by a bandanna-wearing WallStreetBets user with the moniker DeepF-ingValue, Mr Frawley was one of thousands who decided to bet against the doubters, sending GameStop’s once-listless shares into a parabolic rise. WallStreetBets became a rallying cry for Americans disillusioned with a system that some say supports Wall Street institutions over the general public. The stock had been languishing for six years, and many hedge funds were betting on a terminal decline. GameStop is a struggling bricks-and-mortar video game retailer in a world that is rapidly moving online. Reddit’s WallStreetBets would prove the gateway into the 25-year-old Ohio engineer’s wildest ever bet. New York/London/Oslo | Michael Frawley had already been dabbling in financial derivatives for a few months when he joined a raucous, profane trade-tipping internet forum last year. ![]()
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