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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
by creaghpatr 7y ago
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 7y agoOutside 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.