changed the trading game.
Information that’s always been available only to institutional insiders on Wall Street is now available to anyone who wants it. So they can use it to their advantage. Redditors are momentum trading, that’s all they’re doing. They’re looking at what stocks are heavily shorted and collectively pushing the price up to burn those short-sellers and make money in the meantime. That’s what hedge funds have done for decades.
Hedge funds are mad that social media can do this, but welcome to the 21st century, where information flows freely and anyone with wi-fi can place a commission-free order. Social media day traders are just playing the same game.
Also makes very good points about how smart and sophisticated many of these retail traders are. There’s a tendency to assume they’re just knuckleheads who don’t know what they’re doing but that’s not the case. That’s institutional bias. Wall Street has been democratized. Anyone who wants to can play the game. We no longer live in a world where the only people who know about finance and trading are sitting on Wall Street, and everyone else can just buy expensive mutual funds from their highly commissioned broker.
Not to get too dramatic but we are living through a historical moment here and it’s pretty cool.