r/wallstreetbets – Wikipedia

Subreddit dedicated to broth market and options deal
r/wallstreetbets, besides known as WallStreetBets or WSB, is a subreddit where participants discuss stock and option trade. It has become noteworthy for its colorful and blasphemous slang, aggressive trade strategies, harassment and for playing a major role in the GameStop brusque squeeze that caused losses for some uranium firms and short sellers in a few days in early 2021. [ 2 ] The subreddit was founded in 2012 by Jaime Rogozinski, [ 3 ] who has since been removed as a moderator by Reddit administrators. [ 4 ]

overview [edit ]

The subreddit, describing itself through the tagline “ Like 4chan found a Bloomberg terminal “, [ 5 ] is known for its aggressive trade strategies, which primarily revolve around highly bad, leverage options trade. Members of the subreddit are much young retail traders and investors who ignore cardinal investing practices and hazard management techniques, so their activities are much considered gamble. The growing popularity of no-commission brokers and mobile on-line deal has potentially contributed to the increase of such trade trends. Members of the communities frequently see bad day trading as an opportunity to promptly improve their fiscal conditions and obtain extra income. Some of the members tend to use adopt capital, like student loans, to bet on certain “ meme stocks “ that indicate popularity within the community. [ 3 ] [ 6 ] [ 7 ] [ 8 ] [ 9 ]

The subreddit is besides known for its profane and adolescent nature, with members much referring to themselves as “ autists “, “ retards “, “ degenerates ”, and “ apes ”. [ 8 ] [ 10 ] Users besides frequently use slang such as “ stonks ” for stocks ; “ tendies “ for gains or profits ; “ gay bears ” for those who expect a stock to decline, for neckcloth shorters, or as a general insult ; “ DD ” ( from “ due application ” ) for analysis of likely trades ; “ bagholder “ for one whose position has badly dropped in value ; “ diamond hands ” for holding stocks adamantly ; and “ newspaper hands ” for selling at the first gestural of loss. [ 11 ] [ 12 ] [ 13 ]

GameStop short-change squeeze [edit ]

On January 22, 2021, users of r/wallstreetbets initiated a short pinch on GameStop, pushing their stock prices up significantly. This occurred concisely after a comment from Citron Research predicting the value of the stock would decrease. [ 15 ] The store price increased more than 600 percentage by January 26, and its high gear volatility caused trade to be halted multiple times. [ 16 ] [ 17 ] A series of posts by exploiter u/DeepFuckingValue on the subreddit helped to generate pastime in the broth. [ 18 ] After the GameStop stock closed up 92.7 percentage on Tuesday, January 26, business baron Elon Musk tweeted out a link to the r/wallstreetbets subreddit. [ 19 ] On January 27, r/wallstreetbets users besides triggered a short squeeze on AMC, another caller with heavily shorted banal, alike to GameStop. [ 20 ] On January 27, the official r/wallstreetbets Discord server was banned for “ hateful and discriminatory content ”. Discord denied that the banish was related to the ongoing GameStop short squeeze. [ 21 ] In an official statement posted to the r/wallstreetbets subreddit, moderators claimed that their efforts to automatically delete content that violated rules had been overwhelmed by the plain inflow of users, and criticized Discord for not providing the tools needed to take legal action to curtail hate speech on the waiter. [ 22 ] [ better source needed ] Subsequently, the r/wallstreetbets Discord server has been brought back on-line, and staff from Discord have been reported assisting with temperance. [ 23 ] The subreddit was set to private by the moderators at around 7:00 post meridiem EST on January 27, before being made public again around an hour late. [ 24 ] Within one week of the GameStop inadequate squeeze, the subreddit had gained over 2.4 million raw subscribers, whereas previously, it took 9 years for the subreddit to reach 2.2 million. [ 25 ] As of April 18, 2021, the subreddit had 9.8 million followers.

A few days following the short squeeze, some subreddit users started to pay for billboards depicting messages supporting r/wallstreetbets across the nation, which included messages such as “ buying ” and “ holding ” GME shares, other messages consisted of “ we like the stock ” and joining the subreddit, labelling it as a “ movement ”. [ 26 ] Reddit besides ran a five-second commercial during Super Bowl LV celebrating the subreddit, stating that “ underdogs can accomplish precisely about anything when we come together around a common area. ” [ 27 ]

effect on the Robinhood trade platform [edit ]

As of January 2021, many members of the subreddit used the popular mobile app Robinhood to trade stocks and options. Some members have been creditworthy for meaning feature removals and microbe fixes after identifying and publishing methods of exploit. [ 28 ]

Box spread ban [edit ]

Around January 2019, a user known as u/1R0NYMAN sold a box spread creating a $ 300,000 citation that should have netted him from $ 40,000–50,000 over the course of two years. He described the trade as a way to make “ risk-free money ”, but he was unaware of the assignment risk. A few days late, some of the options were exercised against him, causing a passing of over $ 60,000 ; calculating from the original sum in the user account, $ 5,000, the negative return of the barter was 1,832.99 percentage. As a result, Robinhood decided soon after that it would no longer allow the trade of box spreads. The user withdrew $ 10,000 from the account before the positions were closed ; it is believed by the news web site MarketWatch that the brokerage itself took the majority of the loss. [ 29 ]

The “ infinite leverage ” bug [edit ]

Around November 2019, a user known as u/ControlTheNarrative found a bug in Robinhood ‘s trade chopine and exploited it to leverage his original deposit of $ 2,000 all the room up to approximately $ 50,000, resulting in a leverage proportion of approximately 25:1. He sold covered calls and, thanks to the bug, the credit that he received appeared as fluid money on his account. He used the money to buy put options on Apple stock, a craft which led to a loss of $ 46,000, enormous relative to his initial situate of only $ 2,000. [ 30 ] He recorded the live reaction to his personnel casualty and uploaded it on his YouTube channel. [ 31 ] many other users tried to exploit the bug, which they referred to as the “ dislodge money cheat code ”, before it was fixed, with one in particular claim to have opened a $ 1,000,000 stead from a $ 4,000 situate. [ 32 ]

Robinhood restricts trade [edit ]

On January 28, 2021, during the GameStop short-change power play, Robinhood, TD Ameritrade, E-Trade, and Webull restricted the trade wind of heavily shorted stocks such as GameStop, AMC, BlackBerry Limited, Nokia, and Koss Corporation on their platforms. [ 33 ] Many of the brokerage firms, including Robinhood, stated that the restrictions were the solution of clear houses raising the collateral required for executing trades on highly volatile stocks. [ 34 ] numerous members of the community have since expressed rape directed towards those companies, particularly Robinhood. Efforts by r/wallstreetbets members and others across the Reddit platform plummeted Robinhood ‘s asterisk rat in both the io and Android app stores to one star by January 28, though intervention by Google increased its rat to 2.2 ( as of January 30 [ 35 ] ) by deleting one-star reviews. [ 36 ] Class-action lawsuits were subsequently filed against Robinhood for the restrictions on deal. [ 37 ]

Subreddit newspaper trade events [edit ]

On February 19, 2019, the subreddit created its first paper deal contest for users. The top three winners were selected as AmericanPegasus with a 4325 % return, Hypnotwist 3609 % return, and TroneyHap with a 3581 % restitution, a finale third base. [ 38 ] [ 39 ] On February 21, 2019, commenters who posted on the paper trade competition were banned per the subreddit ‘s rules in 2019 of no newspaper trade and a message from the moderator running the contest. [ 40 ] [ 41 ] The fallout from this event resulted in some users banned from the subreddit for a irregular prison term. [ 42 ] On February 10, 2020. Wallstreetbets held its second gear wallpaper trade competition with a lot winnow menu for users to be met with the same bannable rule after the end of the second competition. [ 43 ] [ 44 ] On March 26, 2021, Wallstreetbets held its one-third wallpaper trade competition with results announced on April 1, 2021 as an April Fools Joke. [ 45 ] [ 46 ] Users were temporarily banned from posting and commenting on the subreddit soon after the third rival .

See besides [edit ]

References [edit ]

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