6 ms·

Everyone’s a Day Trader Now

44 points by prostoalex 6y ago

meddlepal 6y ago
This is going to end badly for a lot of people at some point. It’s all fun and games until the market tanks for an extended period of time and people that cannot afford to be are over leveraged in stock.
- javitury 6y ago
  Fees and spreads from overtrading will eat up that money first. If the market tanks for a long time, that's a big problem for everyone (directly or indirectly).
  - mrslave 6y ago
    Exactly the thinking that causes policy makers to keep the cost of borrowing cheap, thus exacerbating the precise vulnerability.
  - sbierwagen 6y ago
    Robinhood doesn't charge commissions. People on WSB lose money the old-fashioned way: by making stupid trades.
    - Blammar 6y ago
      You'd figure they and a broken clock would be right twice a day (unless it's an electronic clock so broken means it's not showing anything...) Also, read this about Robinhood: https://news.ycombinator.com/item?id=23894228 https://news.ycombinator.com/item?id=23894228
      - dehrmann 6y ago
        A clock 1 second fast is never right.
    - qeternity 6y ago
      Robinhood don't charge direct commission, but they do charge commission. It's a bit like traveling and seeing the "no fee" cash exchanges...they don't charge outright fees, they just make their money in the spread. Every market has what's called a bid/offer spread. That's the difference between the price the next buyer will pay, and what the next seller will accept (if the prices were the same, it would result in a trade, and thus back to having different prices). Market makers earn this spread by always being willing to buy low and sell slightly higher. Robinhood traders are largely unsophisticated and place market orders that cross this spread and thus incur the implicit cost. Market making has become to automated that these small spreads (pennies in many cases) are actually extremely lucrative. So, Robinhood goes out to a market maker and says "you can execute all my trades for me, but you'll have to pay me for the privilege because I know you'll make a lot of money off my trades". This is called payment for order flow, and Robinhood makes a lot of money this way.
      - SifJar 6y ago
        This is true, but not overly relevant in this context - the reason lack of commission was mentioned was because someone said that fees will eat away at a day trader's profits before a down market will affect them; with Robinhood or other commission-free brokers, that will not be the case (regardless of how the broker is profiting off the trades - the trader is still going to be getting the best price available on the market, as required by law)
      - ac29 6y ago
        The bid-ask spread on most stocks is 0.01. You'd need to trade a LOT for this to actually make any real difference in your returns. Given that the average size of account at Robinhood is something like $5000, I dont think the average trader there is really getting fleeced by market makers. The bid-ask spread on some of the questionable options Robinhood traders are transacting in is quite a bit higher, though.
        qeternity 6y ago
        You fail to grasp the size of the equities market, as well as tangential trading opportunities. Also options market making against retail is absurdly profitable. There’s a reason Citadel is paying tens of millions of the privilege of executing these trades. Source: former head of quant trading for multi billion dollar hedge fund
  - cactus2093 6y ago
    Exactly, a down market is a problem for anyone with a 401k or savings in etfs. People day trading options may be just as well off in a down market, since they can buy puts or volatility indexes to make money on any direction of market movement.
    - meddlepal 6y ago
      A down market is a problem for people with 401ks or etf only if they’re close to or in retirement. It’s not an issue for most people between 20 and 60.
      - imtringued 6y ago
        Correction, it's an issue for people who need to cash out their stocks. If you lost your job during the pandemic you might need money more than you need well performing stocks so you are forced to sell at a loss.
        stepstop 6y ago
        It’s only a loss if you’ve been invested for a short time. The market is up a ridiculous amount. It would need to drop close to 40% to be back around 2014 levels. You could still sell shares from 2010 that would be sold at a profit, if you’ve been investing for a decade
- runawaybottle 6y ago
  Isn’t an uptick in retail trading a sign it’s already too late for whatever bubble we’re in now? Or is that adage bullshit like everything else related to the economy too?
  - rootsudo 6y ago
    I wonder how the 1920's were like.
    - 082349872349872 6y ago
      Zweig on 1920's hyperinflationary germany (he covers the austrian experience in a different chapter): https://ia601609.us.archive.org/21/items/in.ernet.dli.2015.176552/2015.176552.The-World-Of-Yesterday_text.pdf https://ia601609.us.archive.org/21/items/in.ernet.dli.2015.1... p.238 "Messenger boys established foreign exchange businesses and speculated in currencies of all lands. Towering over all of them was the gigantic figure of the super-profiteer Stinnes. Expanding his credit and exploiting the mark, he bought whatever was for sale, coal mines and ships, factories and stocks, castles and country estates, actually for nothing because every payment, every promise became equal to naught. Soon a quarter of Germany was in his hands and, perversely, the masses, who in Germany always become intoxicated at a success that they can see with their eyes, cheered him as a genius. The unemployed stood around by the thousands and shook their fists at the profiteers and foreigners in their luxurious cars who bought whole rows of streets like a box of matches ; everyone who could read and write traded, speculated and profited and had a secret sense that they were deceiving themselves and were being deceived by a hidden force which brought about this chaos deliberately in order to liberate the State from its debts and obligations." FWIW the guy who brings and empties my skips was giving me tips on Covid medication stocks last week...
      - dehrmann 6y ago
        Inflation in the Weimar Republic was specifically to pay down dept with devalued currency. What we're seeing now is an attempt to fill in a hole left by parts of the economy being shut down. Besides the motivation, a big difference is we don't know if this will be net inflationary or deflationary with the slower velocity of money, bad debt, etc.
- pcr0 6y ago
  Change that to over leveraged in options. I think that's where the real pain is.
  - boromi 6y ago
    Right, most of this is from options trading.
- pearjuice 6y ago
  End badly? The stock market will never see crash in our lifetime again. Since Jerome Powell nationalized the stock market, it's basically Federal Reserve policy to just keep printing money to inflate it. It's all priced in.
  - zadler 6y ago
    The dollar is already losing value.
  - bawana 6y ago
    Exactly. There will never be a crash as all the world just prints money that seeks the highest ROI, and this is only found in financial markets. Witness a booming stock market that is decoupled from record unemployment. Witness the lowest mortgage rates and house sales are booming. People will starve and die before the S&P will. Ultimately our machines and trading algorithms will be churning along as we die of disease, famine, and natural catastrophes.
- chii 6y ago
  > people that cannot afford to be are over leveraged in stock why are they doing it if they cannot afford to do it? If someone made a conscious decision to day trade with money they cannot afford to risk, they have to accept responsibility for losing it when the markets turn sour.
  - loopz 6y ago
    Because they are new and started in propped up markets. They've not seen real volatility yet, and catastrophic damage can happen anytime as Black Swan Event. Besides, the downside to most Options is unlimited.
    - qeternity 6y ago
      The comment was rhetorical. We all know why they are doing it and why they probably shouldn't. I think OP's point was the last bit of the comment: > they have to accept responsibility for losing it when the markets turn sour
      - loopz 6y ago
        No harm to repeat it, especially since the temptation might beat the rational mind.
United857 6y ago
http://archive.is/Ognsr http://archive.is/Ognsr
- zaptrem 6y ago
  I have a WSJ subscription and the website still paywalls me half the time. After signing in I get " Welcome Back We noticed you're already a member. Sign in to read The Wall Street Journal. " And clicking the sign in button links to the same page.
  - DisjointedHunt 6y ago
    Is this the WSJ or Barrons newsletter? Ad blockers and general troubleshooting done?
    - zaptrem 6y ago
      WSJ, latest desktop Safari. No ad blockers. No troubleshooting as I've gotten used to it not working in 100 different ways (most of the time the login button on the sign-in component/page just doesn't do anything)
- J_tt 6y ago
  I really wish the archive.is / CloudFlare standoff would get resolved.
deleted 6y ago
[deleted]
ratsmack 6y ago
I'm wondering what's going to happen when the reality sinks in on the real estate market, especially with all of the restaurants and retail that have closed shop for good. I think all of the REIT's are in for a world of hurt in the 3rd quarter.
- foepys 6y ago
  This could indeed become very interesting not only for retail and restaurant real estate. If there are considerably less entertainment locations in cities, moving to the city could potentially become a lot less attractive, especially for young people. Combined with the current push for remote work by workers and companies alike this could push real estate prices way down.
  - vernon99 6y ago
    Already happening, at least for rentals. We got a massive ranch in Sonoma for 10% the usual price and made a coliving for founders there (btw, hit me up if interested to join)
  - an_opabinia 6y ago
    While it's true that there are more bars and restaurants and opera houses in huge cities, there are still many bars and restaurants everywhere, it was never about bars and restaurants. Just because that's somewhere young people occasionally go and spend some of their income on doesn't mean it's the most important thing, or even the 10th most important thing. Obviously the most valuable part of a city is its demographics. Especially young college educated people, and in really big metropolises, the ones with the hottest real estate markets, of single college educated people between 20-40. To keep this focused, the day trading is mostly caused by returns. That's not saying much. It's pretty crazy how much the retail trader has been outer-performing some classes of professionals though, especially in the last quarter. [1] It isn't on like, having a sophisticated market thesis obviously. It's just this huge, persistent, ugly refutation of the finance professional. Index investing was the vanguard not the main force; retail trading is the main force. [1] https://www.barrons.com/articles/retail-traders-are-beating-hedge-funds-here-are-the-stocks-they-picked-51592236292 https://www.barrons.com/articles/retail-traders-are-beating-...
United857 6y ago
After a lot of retail day traders lost their shirts in the dot-com crash, FINRA made a rule restricting pattern day trading to those with over 25K in their accounts. I wouldn't be surprised to see a similar rule for options trading come out of this.
- cactus2093 6y ago
  It seems ridiculously patronizing to try to lock people that aren’t already rich out of legitimate investment opportunities while other types of gambling like lotteries remain perfectly legal.
  - xmprt 6y ago
    I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. With trading, most of the time, they will lose and someone with millions in the bank will win.
    - cactus2093 6y ago
      What? You have a much higher chance of making money buying a stock than you do of winning the lottery. If you’re talking about “Most of the time”, most of the time you will lose the lottery, but make money on buying a stock, on average at the overall rate of return of the market as a whole.
      - imtringued 6y ago
        You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. It's easy for commercial investors to push out retail traders because they can provide more liquidity. Retail investors (aka people buying stocks as investment) are unaffected by that limit.
        qeternity 6y ago
spir 6y ago
Ethereum-based options trading is going to enable these consumer experiences to be global, private, decentralized, and self-sovereign within a few years. It works already, but has many sharp edges. When that happens, retail investors in Utah or Uganda will be able to short TSLA on a web app; no regulators involved, thank you very much. The implications are exciting and concerning.
- jayd16 6y ago
  Just because you do it on a block chain doesn't mean you're "self-sovereign." That's just tax fraud.
  - spir 6y ago
    Pardon me, I wasn't clear. I am not advocating for tax fraud or illegality :) Self-sovereignty is a technical characteristic of blockchains where nobody can prove you own a asset or did a transaction. That makes it hard to prove tax compliance or non-compliance. To those who think Ethereum on-chain activity is merely pseudonymous and not private, you're correct, but only temporarily, because zero knowledge platforms are arriving and will enable many common financial activities to be performed in a truly private context.
    - jayd16 6y ago
      If it happened and you don't report it, that's fraud. It doesn't matter how easy it is to not report it. This would apply to any other regulation as well, not just taxes.
  - lostmsu 6y ago
    I don't think you understood what parent said: US government does not prevent people from trading directly, however in practice some can't do it, because all trading platforms are obliged to restrict "unaccredited" people. It is unclear how this will apply to decentalized currencies. Right now I'd say it does not apply at all, if everything happens on chain. This has nothing to do with people paying or evading taxes after a trade.
dehrmann 6y ago
> She mostly buys blocks of stocks that trade for less than $5 a share and sells many of them within a day or two...The potential for big gains—increases of mere pennies per share in some cases—outweighs the risks, she said. Citadel must be making a killing on market making, right now.
- loopz 6y ago
  It takes 100% to gain back -50%.
deleted 6y ago
[deleted]
akyu 6y ago
I understand the instinctual cynicism that many have when they view the recent surge in retail trading. But I genuinely believe this is not only a good shift, but a needed one. Will some people get burnt with YOLO options trades? Absolutely. But guess what, holding onto cash in a savings account is getting you burnt right now too, its just happening too slow for most to realize. In reality, we are all traders and virtually every financial action we take (or don't take) is a trade. Doing nothing with your money is a trade. Buying a house is a trade. Investing in a 401k is a trade. Buying pokemon cards is a trade. The fact that the current generation of high schoolers/college kids think investing and trading is cool is actually a really good thing. The world is becoming increasingly financialized and they need to understand this. The financial gatekeepers have had their fun for long enough.
- asplake 6y ago
  Money lost trading is lost forever. The slow decline of the value of cash is hardly comparable. Not that I like the metaphor, but if doing nothing is a trade, it’s holding an option that costs little to maintain.

44 points by prostoalex 6y ago

This is going to end badly for a lot of people at some point. It’s all fun and games until the market tanks for an extended period of time and people that cannot afford to be are over leveraged in stock.

javitury 6y ago
Fees and spreads from overtrading will eat up that money first. If the market tanks for a long time, that's a big problem for everyone (directly or indirectly).
- mrslave 6y ago
  Exactly the thinking that causes policy makers to keep the cost of borrowing cheap, thus exacerbating the precise vulnerability.
- sbierwagen 6y ago
  Robinhood doesn't charge commissions. People on WSB lose money the old-fashioned way: by making stupid trades.
  - Blammar 6y ago
    You'd figure they and a broken clock would be right twice a day (unless it's an electronic clock so broken means it's not showing anything...) Also, read this about Robinhood: https://news.ycombinator.com/item?id=23894228 https://news.ycombinator.com/item?id=23894228
    - dehrmann 6y ago
      A clock 1 second fast is never right.
  - qeternity 6y ago
    Robinhood don't charge direct commission, but they do charge commission. It's a bit like traveling and seeing the "no fee" cash exchanges...they don't charge outright fees, they just make their money in the spread. Every market has what's called a bid/offer spread. That's the difference between the price the next buyer will pay, and what the next seller will accept (if the prices were the same, it would result in a trade, and thus back to having different prices). Market makers earn this spread by always being willing to buy low and sell slightly higher. Robinhood traders are largely unsophisticated and place market orders that cross this spread and thus incur the implicit cost. Market making has become to automated that these small spreads (pennies in many cases) are actually extremely lucrative. So, Robinhood goes out to a market maker and says "you can execute all my trades for me, but you'll have to pay me for the privilege because I know you'll make a lot of money off my trades". This is called payment for order flow, and Robinhood makes a lot of money this way.
    - SifJar 6y ago
      This is true, but not overly relevant in this context - the reason lack of commission was mentioned was because someone said that fees will eat away at a day trader's profits before a down market will affect them; with Robinhood or other commission-free brokers, that will not be the case (regardless of how the broker is profiting off the trades - the trader is still going to be getting the best price available on the market, as required by law)
    - ac29 6y ago
      The bid-ask spread on most stocks is 0.01. You'd need to trade a LOT for this to actually make any real difference in your returns. Given that the average size of account at Robinhood is something like $5000, I dont think the average trader there is really getting fleeced by market makers. The bid-ask spread on some of the questionable options Robinhood traders are transacting in is quite a bit higher, though.
      - qeternity 6y ago
        You fail to grasp the size of the equities market, as well as tangential trading opportunities. Also options market making against retail is absurdly profitable. There’s a reason Citadel is paying tens of millions of the privilege of executing these trades. Source: former head of quant trading for multi billion dollar hedge fund
- cactus2093 6y ago
  Exactly, a down market is a problem for anyone with a 401k or savings in etfs. People day trading options may be just as well off in a down market, since they can buy puts or volatility indexes to make money on any direction of market movement.
  - meddlepal 6y ago
    A down market is a problem for people with 401ks or etf only if they’re close to or in retirement. It’s not an issue for most people between 20 and 60.
    - imtringued 6y ago
      Correction, it's an issue for people who need to cash out their stocks. If you lost your job during the pandemic you might need money more than you need well performing stocks so you are forced to sell at a loss.
      - stepstop 6y ago
        It’s only a loss if you’ve been invested for a short time. The market is up a ridiculous amount. It would need to drop close to 40% to be back around 2014 levels. You could still sell shares from 2010 that would be sold at a profit, if you’ve been investing for a decade
runawaybottle 6y ago
Isn’t an uptick in retail trading a sign it’s already too late for whatever bubble we’re in now? Or is that adage bullshit like everything else related to the economy too?
- rootsudo 6y ago
  I wonder how the 1920's were like.
  - 082349872349872 6y ago
    Zweig on 1920's hyperinflationary germany (he covers the austrian experience in a different chapter): https://ia601609.us.archive.org/21/items/in.ernet.dli.2015.176552/2015.176552.The-World-Of-Yesterday_text.pdf https://ia601609.us.archive.org/21/items/in.ernet.dli.2015.1... p.238 "Messenger boys established foreign exchange businesses and speculated in currencies of all lands. Towering over all of them was the gigantic figure of the super-profiteer Stinnes. Expanding his credit and exploiting the mark, he bought whatever was for sale, coal mines and ships, factories and stocks, castles and country estates, actually for nothing because every payment, every promise became equal to naught. Soon a quarter of Germany was in his hands and, perversely, the masses, who in Germany always become intoxicated at a success that they can see with their eyes, cheered him as a genius. The unemployed stood around by the thousands and shook their fists at the profiteers and foreigners in their luxurious cars who bought whole rows of streets like a box of matches ; everyone who could read and write traded, speculated and profited and had a secret sense that they were deceiving themselves and were being deceived by a hidden force which brought about this chaos deliberately in order to liberate the State from its debts and obligations." FWIW the guy who brings and empties my skips was giving me tips on Covid medication stocks last week...
    - dehrmann 6y ago
      Inflation in the Weimar Republic was specifically to pay down dept with devalued currency. What we're seeing now is an attempt to fill in a hole left by parts of the economy being shut down. Besides the motivation, a big difference is we don't know if this will be net inflationary or deflationary with the slower velocity of money, bad debt, etc.
pcr0 6y ago
Change that to over leveraged in options. I think that's where the real pain is.
- boromi 6y ago
  Right, most of this is from options trading.
pearjuice 6y ago
End badly? The stock market will never see crash in our lifetime again. Since Jerome Powell nationalized the stock market, it's basically Federal Reserve policy to just keep printing money to inflate it. It's all priced in.
- zadler 6y ago
  The dollar is already losing value.
- bawana 6y ago
  Exactly. There will never be a crash as all the world just prints money that seeks the highest ROI, and this is only found in financial markets. Witness a booming stock market that is decoupled from record unemployment. Witness the lowest mortgage rates and house sales are booming. People will starve and die before the S&P will. Ultimately our machines and trading algorithms will be churning along as we die of disease, famine, and natural catastrophes.
chii 6y ago
> people that cannot afford to be are over leveraged in stock why are they doing it if they cannot afford to do it? If someone made a conscious decision to day trade with money they cannot afford to risk, they have to accept responsibility for losing it when the markets turn sour.
- loopz 6y ago
  Because they are new and started in propped up markets. They've not seen real volatility yet, and catastrophic damage can happen anytime as Black Swan Event. Besides, the downside to most Options is unlimited.
  - qeternity 6y ago
    The comment was rhetorical. We all know why they are doing it and why they probably shouldn't. I think OP's point was the last bit of the comment: > they have to accept responsibility for losing it when the markets turn sour
    - loopz 6y ago
      No harm to repeat it, especially since the temptation might beat the rational mind.

United857 6y ago

http://archive.is/Ognsr http://archive.is/Ognsr

zaptrem 6y ago
I have a WSJ subscription and the website still paywalls me half the time. After signing in I get " Welcome Back We noticed you're already a member. Sign in to read The Wall Street Journal. " And clicking the sign in button links to the same page.
- DisjointedHunt 6y ago
  Is this the WSJ or Barrons newsletter? Ad blockers and general troubleshooting done?
  - zaptrem 6y ago
    WSJ, latest desktop Safari. No ad blockers. No troubleshooting as I've gotten used to it not working in 100 different ways (most of the time the login button on the sign-in component/page just doesn't do anything)
J_tt 6y ago
I really wish the archive.is / CloudFlare standoff would get resolved.

deleted 6y ago

[deleted]

ratsmack 6y ago

I'm wondering what's going to happen when the reality sinks in on the real estate market, especially with all of the restaurants and retail that have closed shop for good. I think all of the REIT's are in for a world of hurt in the 3rd quarter.

foepys 6y ago
This could indeed become very interesting not only for retail and restaurant real estate. If there are considerably less entertainment locations in cities, moving to the city could potentially become a lot less attractive, especially for young people. Combined with the current push for remote work by workers and companies alike this could push real estate prices way down.
- vernon99 6y ago
  Already happening, at least for rentals. We got a massive ranch in Sonoma for 10% the usual price and made a coliving for founders there (btw, hit me up if interested to join)
- an_opabinia 6y ago
  While it's true that there are more bars and restaurants and opera houses in huge cities, there are still many bars and restaurants everywhere, it was never about bars and restaurants. Just because that's somewhere young people occasionally go and spend some of their income on doesn't mean it's the most important thing, or even the 10th most important thing. Obviously the most valuable part of a city is its demographics. Especially young college educated people, and in really big metropolises, the ones with the hottest real estate markets, of single college educated people between 20-40. To keep this focused, the day trading is mostly caused by returns. That's not saying much. It's pretty crazy how much the retail trader has been outer-performing some classes of professionals though, especially in the last quarter. [1] It isn't on like, having a sophisticated market thesis obviously. It's just this huge, persistent, ugly refutation of the finance professional. Index investing was the vanguard not the main force; retail trading is the main force. [1] https://www.barrons.com/articles/retail-traders-are-beating-hedge-funds-here-are-the-stocks-they-picked-51592236292 https://www.barrons.com/articles/retail-traders-are-beating-...

United857 6y ago

After a lot of retail day traders lost their shirts in the dot-com crash, FINRA made a rule restricting pattern day trading to those with over 25K in their accounts. I wouldn't be surprised to see a similar rule for options trading come out of this.

cactus2093 6y ago
It seems ridiculously patronizing to try to lock people that aren’t already rich out of legitimate investment opportunities while other types of gambling like lotteries remain perfectly legal.
- xmprt 6y ago
  I'm not a fan of lotteries either but when someone plays a lottery, they have fair odds of winning. With trading, most of the time, they will lose and someone with millions in the bank will win.
  - cactus2093 6y ago
    What? You have a much higher chance of making money buying a stock than you do of winning the lottery. If you’re talking about “Most of the time”, most of the time you will lose the lottery, but make money on buying a stock, on average at the overall rate of return of the market as a whole.
    - imtringued 6y ago
      You don't get a market return from day trading. The only way you can make money off of day trading is by providing liquidity and the amount of liquidity needed in a market is limited by volume. It's easy for commercial investors to push out retail traders because they can provide more liquidity. Retail investors (aka people buying stocks as investment) are unaffected by that limit.
      - qeternity 6y ago

spir 6y ago

Ethereum-based options trading is going to enable these consumer experiences to be global, private, decentralized, and self-sovereign within a few years. It works already, but has many sharp edges. When that happens, retail investors in Utah or Uganda will be able to short TSLA on a web app; no regulators involved, thank you very much. The implications are exciting and concerning.

jayd16 6y ago
Just because you do it on a block chain doesn't mean you're "self-sovereign." That's just tax fraud.
- spir 6y ago
  Pardon me, I wasn't clear. I am not advocating for tax fraud or illegality :) Self-sovereignty is a technical characteristic of blockchains where nobody can prove you own a asset or did a transaction. That makes it hard to prove tax compliance or non-compliance. To those who think Ethereum on-chain activity is merely pseudonymous and not private, you're correct, but only temporarily, because zero knowledge platforms are arriving and will enable many common financial activities to be performed in a truly private context.
  - jayd16 6y ago
    If it happened and you don't report it, that's fraud. It doesn't matter how easy it is to not report it. This would apply to any other regulation as well, not just taxes.
- lostmsu 6y ago
  I don't think you understood what parent said: US government does not prevent people from trading directly, however in practice some can't do it, because all trading platforms are obliged to restrict "unaccredited" people. It is unclear how this will apply to decentalized currencies. Right now I'd say it does not apply at all, if everything happens on chain. This has nothing to do with people paying or evading taxes after a trade.

dehrmann 6y ago

> She mostly buys blocks of stocks that trade for less than $5 a share and sells many of them within a day or two...The potential for big gains—increases of mere pennies per share in some cases—outweighs the risks, she said. Citadel must be making a killing on market making, right now.

loopz 6y ago
It takes 100% to gain back -50%.

deleted 6y ago

[deleted]

akyu 6y ago

I understand the instinctual cynicism that many have when they view the recent surge in retail trading. But I genuinely believe this is not only a good shift, but a needed one. Will some people get burnt with YOLO options trades? Absolutely. But guess what, holding onto cash in a savings account is getting you burnt right now too, its just happening too slow for most to realize. In reality, we are all traders and virtually every financial action we take (or don't take) is a trade. Doing nothing with your money is a trade. Buying a house is a trade. Investing in a 401k is a trade. Buying pokemon cards is a trade. The fact that the current generation of high schoolers/college kids think investing and trading is cool is actually a really good thing. The world is becoming increasingly financialized and they need to understand this. The financial gatekeepers have had their fun for long enough.

asplake 6y ago
Money lost trading is lost forever. The slow decline of the value of cash is hardly comparable. Not that I like the metaphor, but if doing nothing is a trade, it’s holding an option that costs little to maintain.