In-Depth: Citadel Connect and Dark Pools Uncovered
MTim Fries, 20 July 2021
Before dark pools, institutional investors had to trade in blocks of shares outside trading hours to avoid upsetting the market. Now, the utility found within dark pools is so high that some market makers have embedded them within their operations. There are certainly some benefits here in terms of increased liquidity, but there’s another side of the coin as well.
Throughout 2021, retail traders have uncovered significant short positions held by hedge funds in a number of stocks. Naked short selling is suspected by many retail traders to be involved. At this point, hedge funds have collectively lost $12 billion—so far. Continue reading “Article: In-Depth: Citadel Connect and Dark Pools Uncovered”
Want to Make $1 Million? Market Manipulation Is Back! (Thanks to Social Media)
Thomas Yeung, 16 July 2021
When Keith “Roaring Kitty” Gill announced he was buying GameStop (NYSE:GME) shares and options on Reddit’s r/WallStreetBets, regulators might have considered his outrageous claims as parody — speech protected by First Amendment rights. Who could take $20 calls on GME seriously when the stock was trading at $5?
Since then, other social media forums have blurred the lines between satire and intentional deception. This week, shares in SCWorks (NASDAQ:WORX) doubled after traders on Discord and Twitter banded together to push prices higher. MINM, DTSS and an alphabet soup of other small-cap stocks have followed the same path Continue reading “Article: Want to Make $1 Million? Market Manipulation Is Back! (Thanks to Social Media)”
Is Discord the Next r/WallStreetBets? 5 Stocks That Suggest That’s the Case
Thomas Yeung, 09 July 2021
If you want to become a day trader, I don’t blame you. People who consistently earn several percentage points per day can become wealthy beyond belief. Crypto arbitrageur Sam Bankman-Fried recently became a minor celebrity after revealing he was a billionaire by age 29.
Typically, professional traders like Mr. Bankman-Fried are either exploiting price differentials or using some form of statistical arbitrage. That’s when investors profit from minor pricing divergences across different exchanges or assets. Continue reading “Article: Is Discord the Next r/WallStreetBets? 5 Stocks That Suggest That’s the Case”
Meme stocks show that ‘community’ is profitable: Reddit co-founder
Thomas Hum, 28 June 2021
As trading platforms like Robinhood create a rise in retail investor market participation and spark a renewed interest in shares of companies dubbed “meme stocks” like GameStop (GME), BlackBerry (BB), and AMC (AMC), the world of finance is seeing an intersection with the social media sphere.
“What you’re seeing is a much larger trend here,” Alexis Ohanian, founder of venture capital firm Seven Seven Six and co-founder of Reddit, told Yahoo Finance Live. “It is the intersection of community and capital. It’s the intersection of social media and finance.” Continue reading “Article: Meme stocks show that ‘community’ is profitable: Reddit co-founder”
AMC FUD Runneth Over: Panic at the Casino!
Kevin Cook, 21 June 2021
My Marine son made over 300% on his AMC Entertainment (AMC) shares this month that he bought in the teens. And even though he never called himself an “ape” as the kids do, he was following a lot of intel from message boards like Reddit’s WallStreetBets.
It all started when he returned home from a deployment in the Middle East before Thanksgiving. He and his wife were getting more interested in investing options as their savings accumulated. I had already helped him pick some long-term funds a few years prior, but wanted to get them exposed to the cutting-edges of technology in ARK Invest funds like the ARK Innovation ETF (ARKK). Continue reading “Article: AMC FUD Runneth Over: Panic at the Casino!”
ITUB Stock: A Story of Reddit, Warren Buffett and Currency Manipulation Allegations
Brenden Rearick, 16 June 2021
You’ve got to hand it to r/WallStreetBets: They’ve gotten very robust in their stock selection process as compared to the GameStop (NYSE:GME) era. The message board, which has grown significantly in the first half of the year, is picking mortgage REITs and private prisons as some of the latest meme stocks. It should not be a surprise then that the retail investor group is looking to follow whales to new frontiers, like they are doing today with Itaú Unibanco Holdings (NYSE:ITUB) stock. Continue reading “Article: ITUB Stock: A Story of Reddit, Warren Buffett and Currency Manipulation Allegations”
Catching Rides on Meme-Mafia Trades May Boil Down to Models
Lu Wang, 13 June 2021
Staring at a meme stock craze that shows few signs of abating, Wall Street is still wrestling with how to trade it.
Many traders scroll through Reddit blogs that cheer on day traders to suss out the next big thing. Others obsessively track Stocktwits citations. There are even firms hiring WallStreetBets veterans to get inside the heads of the people who call themselves apes with diamond hands. Continue reading “Article: Catching Rides on Meme-Mafia Trades May Boil Down to Models”
Financial Regulation After GameStop: The Game Will Go On!
Ariadna Dumitrescu, 10 June 2021
vThe Covid-19 crisis came at the end of more than two decades that witnessed a significant transformation of financial markets with main catalysts such as financial innovation, technology adoption, and financial regulations. The 2020 stock market’s roller coaster (record price levels and volatility) exposed the financial system’s fragility. This year, the increased volatility in so-called ‘meme’ stocks – i.e., stocks whose trading volume increases not because of the company’s good performance, but because of hype on social media –, has highlighted several problems in financial markets. Although seemingly unimportant, the risk that these events could pose to the entire financial system opens the door for discussions on the implementation of new regulations (or the improvement of older ones). Continue reading “Article: Financial Regulation After GameStop: The Game Will Go On!”
AMC stock jumps nearly 15% as retail-fueled rally stretches to another week
Yun Li, 07 June 2021
AMC Entertainment, the meme stock that amazed Wall Street recently, rallied double digits on Monday as speculative trading activity in the struggling movie theater gained steam.
Shares of AMC jumped as much as 25% Monday, following an 80% rally in the previous week. AMC has dethroned GameStop to become the star on the infamous WallStreetBets forum on Reddit, with retail traders encouraging each other to pile into the shares and call options. AMC Shares closed 14.8% higher at $55 on Monday. Continue reading “Article: AMC stock jumps nearly 15% as retail-fueled rally stretches to another week”
Hossein Azari of cmorq Discusses Meme Stocks, Sees DeFi as an Answer to Retail Desires
JD Alois, 04 June 2021
The rise of the “meme stocks” has been a fascinating adventure with the combination of ubiquitous technology and the ability to drive trading by retail investors in a way that has never been experienced before. While a certain amount of manipulation of markets has always existed, the recent advent of trading forums, like Wallstreetbets on Reddit, and other digital communication methods, has shifted some of the influence away from big money to smaller investors pooling resources.
The phenomenon really gained traction when GameStop (NYSE:GME), a highly shorted equity by certain hedge funds, became a focus for a targeted short squeeze. In brief, smaller investors, many trading on Robinhood, rocketed the price of GME higher causing certain hedge funds to lose money in a classic short squeeze. Continue reading “Article: Hossein Azari of cmorq Discusses Meme Stocks, Sees DeFi as an Answer to Retail Desires”
The Market Is Ripe For Another GameStop Saga
Michael Kern , 31 May 2021
About three months ago, the investing world was left reeling after retail investors proved they can beat Wall Street at its own game.
Reddit group “r/Wallstreetbets” (aka WSB)–a longstanding subreddit channel created nearly a decade ago where more than 4 million Reddit users discuss highly speculative trading strategies and ideas–engaged in a crowdsourced pump-and-dump scheme that created massive volatility in the stock markets by buying heavily shorted stocks such as GameStop Inc. (NYSE:GME), AMC Entertainment Holdings (NYSE:AMC), and BlackBerry Inc. (NYSE:BB), among others. The massive buying wave created large short squeezes as hedge funds betting against these stocks rushed to cover their positions and cut losses after GME skyrocketed an unfathomable 1,500% in the space of a few days; AMC saw its share price triple while BB jumped 460% before they came crashing to the ground after popular zero-fee trading app Robinhood blocked trading activity. Continue reading “Article: The Market Is Ripe For Another GameStop Saga”
AMC, Gamestop: Meme stocks roar back, fueled by Reddit-inspired traders
Ethan Wolff-Mann, 28 May 2021
In January 2021, the rise of retail investing and the subreddit r/WallStreetBets sparked a broader speculative movement in a few stocks that ended up disrupting trading at brokerages and culminating in a Congressional hearing.
And after a relatively quiet few months, the so-called meme stocks are back in a big way.
The movement’s mascot, GameStop (GME), ended the week up 23.6%. (Analysts from Vanda Research said that this was likely due to institutional involvement rather than a big retail push.) And the new meme stock leader is AMC (AMC), which has taken over the narrative with an enormous 108.9% gain for the week. Continue reading “Article: AMC, Gamestop: Meme stocks roar back, fueled by Reddit-inspired traders”
Russian central bank to expand market manipulation criteria
Elena Fabrichnaya, 13 May 2021
MOSCOW, May 13 (Reuters) – Russia’s central bank said on Thursday it plans to expand a list of actions deemed to be market manipulation, facing a need to protect growing numbers of retail investors after a series of cases involving what it called malicious transactions.
Retail investors flooded to the market in 2020 as central bank rate cuts reduced the appeal of bank deposits and the COVID-19 pandemic left people working from home and with time to spare. Continue reading “Article: Russian central bank to expand market manipulation criteria”
Robinhood’s Big Gamble
Sheelah Kolhatkar, 10 May 2021
Early on the morning of January 19th, Cody Herdman woke to the vibration of his smartphone alarm under his pillow. He immediately checked the finance app Robinhood for the trading price of a company called GameStop. Herdman, who is nineteen, is a freshman computer-science major at Dakota State University, where until recently he played center for the Dakota State Trojans football team, and he had been investing in the stock market for a month.
Robinhood, which offers zero-commission trading in stocks and cryptocurrencies, pitches itself as an enlightened version of Wall Street; its stated mission is to “democratize finance for all.” Herdman’s friend Chase Bradshaw had introduced him to trading on the app, which now consumed much of the time that he used to spend playing video games. Continue reading “Article: Robinhood’s Big Gamble”