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I’ve made millions on WSB options plays. I can finally quit my job and stop being a cubicle slave. The visceral reaction from the media on this is disgusting. M

I’ve made millions on WSB options plays. I can finally quit my job and stop being a cubicle slave. The visceral reaction from the media on this is disgusting. Major hedge funds got caught on the wrong side of this, and have been making a huge stink about it. CNBC to the rescue, demonizing young middle class Reddit investors. This whole thing has opened my eyes to how even my FAANG compensation is peasant money, it’s too little even as someone in the top few percent of incomes. Capital > labor

taway0125210 6y ago
Here's my account, that might be survivorship bias. I also traded tech stocks and cryptos and was able to significantly beat the market on the former and quit (also from Amazon) a few years ago. I invested in NVidia after recognizing GPU shortages due to ML continuing hype. I switched to AMD after recognizing their Zen CPUs are slowly beating Intel. I switched to TSMC after realizing their accomplishments are significant part of M1 and Ryzen advantages. My stock portfolio's growth is over +50% yoy over last five years on average (geomean). The way I explain this to myself is that trading firms focus on economic fundamentals, which can not show upper hand in a specific technology. They are trying to recognize the later, but it requires understanding tech news articles, and best NLP AI methods are not there yet, whereas our brains can handle that task, especially if it is withing our own expertise. If that theory is right, you can beat the market, but you have to be real expert in the area you are trying to trade in, and probably a few linked areas too.
- shouldiquitamzn 6y ago
  So funny you say this. The two stocks that got me started were Shopify and data dog. I knew datadog was a great freshly IPOd cloud play, Shopify would boom due to the lockdowns. So I put a ton of money in Shopify calls at the March bottom, then rolled the profits into Data dog, then Apple and so on. It was absolutely my understanding of e-commerce that gave me the confidence. Also how lockdowns related to the cloud. It’s only been lately that I’ve taken shots on MEME stocks. Deep tech understanding, scouring cathie woods ARKK etf has been very profitable. But I think from a broader perspective, I’ve made huge leveraged bets on VTSAX/SPY/IWM on stimulus news. Very obvious that financial assets will inflate with each extra fed move.
  - taway0125210 6y ago
    I am keeping my bets conservative. These were all long term (1+ years) except a few option trades. Consider this a hedge against the very phenomenon discussed in this article.
- ralfd 6y ago
  Can I subscribe to your newsletter? What is the next trend in your opinion?
- m3kw9 6y ago
  So what’s next?
- m3kw9 6y ago
  I have the exact same thought, quants and AI cannot predict long term, and that’s where to compete. Didn’t think I’d find similarly thinking people out here, where do I find more to talk to?!
- thrwyoilarticle 6y ago
  The market's complete lack of pricing-in the amazing reviews Zen received was enlightening.
  - ragazzina 6y ago
    The last few months I've often wondered if the same thing is happening with the M1.
- tootie 6y ago
  Trading firms do not focus on fundamentals. They have teams of industry experts doing the exact same kind of research you were doing.
- imtringued 6y ago
  If trading firms merely focused on economic fundamentals then we would see far less bubbles. You have to abandon economic fundamentals to cause and take advantages of bubbles and an economy built on bubbles is not healthy. It's built on mania.
flakeandgray 6y ago
Congratulations to you! Can I ask where/how did you learn to do what you did? Did you first learn general stock market investing or did you skip straight to options? Any advice and/or resources would be much appreciated. Thanks!
- deleted 6y ago
  [deleted]
abbbccdefd 6y ago
Yeah, running Hedge Funds like Melvin capital is where the real money is. They get a 30% cut of profits they make from their clients money and they have around $10 billion under management. They were up 50% last year so the management team took home ~$1.5 billion. They're deep in the red, down 30%, first month of 2021, due to the systemic risk they took on from all their bloated retail store short positions, but that's okay because the money they're losing is their clients and not theirs. When they blow up, they talk to their media contacts and lay the blame on retail day traders ganging up on them and start a new fund.
leowoo91 6y ago
You might got lucky or not, but your comment is very dangerous for the people who have no idea and haven't been in the field. FAANG compensation is not peasant to billions of people, so please don't do that.
- shouldiquitamzn 6y ago
  I made the money myself, I didn’t get lucky. Edit: The money was made over a 100 trades
  - edgyquant 6y ago
    Yes you did get lucky on an option play
    - shouldiquitamzn 6y ago
      I made over 100 trades
      - mempko 6y ago
        What's your return distribution look like on those trades? Pareto?
      - edgyquant 6y ago
        I make winning option trades as well, as a hedge against my portfolio. If you made a disproportionate amount of cash of an options play it was luck. I’ve done it before, made almost 1500% on an AGFS play when I saw a consistent downtrend in it. But it was luck and nothing else.
        totalZero 6y ago
        This is a really, truly bad take. Option prices move every day. There do exist, in fact, some people who are very skilled at making money trading options. Some people do it for a living with rich people's money, and many of them have the same skillset/education as the general HN audience. If this guy actually made millions over the course of dozens of trades, it makes more sense to let him talk than to downvote him and tell him that he's just an aberration of probability lol. Like, what do you gain by that? If he's lying, humor him and enjoy the conversation. If he's telling the truth, pick his brain.
in3d 6y ago
You’re a lottery winner, congrats. People made money during the tulip mania also. You’ve given money to the Wall Street, not taken it away. The biggest winners are companies like Robin Hood and hedge funds who buy their order flow data and hedge funds that take advantage of the bubble to play this, while the losers will be small investors who were late to the game and believed the bullshit about how it’s anything more than a bubble.
- smabie 6y ago
  that's not how it works. Email me if you are genuinely interested in the how the institutional investors and market makers fit into this whole ecosystem. I'm tired of explaining market structure/incentives on HN. hint: wall st money was lost on gme, not made. Market makers got killed trying to hedge those deltas, over and over again (it is impossible to statically hedge an option you have sold with a long/short position in the underlying tho in some cases like far ITM options, you can pretend like you can because the options delta is 1)
  - sammy533 6y ago
    Can you link your comment where you explain it?
- shouldiquitamzn 6y ago
  No I made this money myself. In any time in basically the last decade, if you leveraged up on the SPY or QQQ, you are now retired. People are too risk averse, they will be stuck in a job forever
  - bitcoinmoney 6y ago
    How do we replicate your success?
    - kapp_in_life 6y ago
      QQQ is a good idea until you hit a bear market. So live through 10 years of consistent positive gains every year in the market and you too can leverage QQQ to make millions. Taking lots of risk is good in a bull market.
jameshart 6y ago
You played a game, you played it well, and you won. Well done. But don't pretend that that means everyone can do it, because patently they can't: you won your bets, a bunch of other people lost theirs. No value that wouldn't otherwise have been created got made, you just shifted the balance of how the rewards are distributed in your favor, and away from someone else. As a system for distributing the benefits of economic production, allocating it to the winners of a complex iterated social game seems suboptimal. Like if we used 'Among Us' tournaments to distribute food. But hey, glad it's working out for you.
- glohbalrob 6y ago
  same can be said about just about anything, no? running marathons, startups, cooking a great dish... No one on WSB is saying its for everyone, thats why they talk trash about themselves.
  - deleted 6y ago
    [deleted]
  - ausbah 6y ago
    you can learn to run a marathon, cook, etc. with a much higher chance of success then something like trading stocks or to a less degree starting a business. the latter pursuits have a much more volatile environment that rewards luck > skill
    - koheripbal 6y ago
      Investing is not luck. It's luck if you make just one or two trades. In the long run, statistical iterations (that you have modeled/researched correctly) will give you positive returns with a very high confidence. Situations like in this post are obviously not that. I have a trading strategy that I execute over hundreds of trades per year based upon financial modeling and financial statement analysis. There's a little luck involved, but over many trades, the luck aspect cancels itself out. It's like rolling the dice. If you bet on getting a certain number, and roll once, it's luck. If you bet on averaging a certain number and roll 1000 times, there's virtually no luck at all.
dingaling 6y ago
> demonizing young middle class Reddit investors They're not investors. Their money doesn't help the company.
- L-four 6y ago
  Yes it does, the company can do a stock split and sell more shares.
- kelnos 6y ago
  Not directly. But driving up a company's market cap can make its stock more attractive to a potential acquisition target. Or it can simply sell shares of itself at the new, higher price.
- dmurray 6y ago
  At least in this case, GameStop has filed to raise up to $100,000,000 through an ATM offering (selling shares to the public) [0]. So yes, the recent activity does help the company, in so far as GME is a company that can be helped by getting its hands on more cash. [0] https://www.sec.gov/Archives/edgar/data/1326380/000119312520312805/d67321d424b5.htm https://www.sec.gov/Archives/edgar/data/1326380/000119312520...
  - viraptor 6y ago
    Did that go through? Releasing new overpriced shares while the price is being obviously raising unrelated to the company performance sounds super dodgy.
    - thrwyoilarticle 6y ago
      Worked fine for Tesla and Apple.
    - dmurray 6y ago
      They planned to sell them before the current rally (the document is dated December 8). They haven't released details of how many they sold, or on what dates. It's not clear what view the SEC would take if they fast tracked an ATM offering now. Hertz were told to knock it off, but they were literally trading in bankruptcy. There's a pretty good argument to be made that issuing more shares is if anything the responsible thing to do to in response to increased demand, since it would help to correct the anomalous price rally.
shrikant 6y ago
Since this comment is one of the top threads, I'm just going to re-post my earlier comment from one of the sub-threads: This comment about having made millions leveraging on SPY and QQQ over the course of 100+ trades doesn't check out, given that a few days back, this commenter created this throwaway account to complain about finding it hard to quit their job at Amazon because the pay is so good. https://news.ycombinator.com/item?id=25878201 https://news.ycombinator.com/item?id=25878201 IOW, they're lying for Internet points.
- irjustin 6y ago
  Perhaps this guy isn't real, but there's plenty of guys on WSB who have been able to do it. They're the dream to achieve. I admit I'm jealous myself because I missed out on great buys like NIO, PLTR, GME. I'm paying attention now, but I'm worried I missed the boat already.
  - Miner49er 6y ago
    In my experience there will likely be another boat (or yatch). Back in 2016/2017 the meme was AMD, then there was TSLA and then GME, and lots of smaller ones in between. There will be more.
    - neuronic 6y ago
      Not if the boomers activate the SEC. All it takes is one reddit ban of WSB. People won't just reorganize somewhere else, it never happens. Sure, a bunch of them will be somewhere else for 4 months but then the movement is dies because most WSB users will stick to reddit long term.
      - Miner49er 6y ago
        True, but I don't think that's likely to happen.
- thinkingemote 6y ago
  As the article points out, it's about reality being controlled. In this case the user wrote something to change reality for their benefit. The change they want is for more people to play the wsb game. And for more people to believe that the game has many winners. The mistake is that their message was untruthful, it was an exaggerated attempt to create hype. Or. It was a user lying to make them get attention on the internet and feel better for a short amount of time, but I like my first idea as it's directly called out in the subject we are discussing. Thanks for unveiling it! edits - I think its also like if you say something is important enough, it becomes important. So if wall street are still debating if wsb is or isnt actually relevant it means they already are. So the message is twofold. Firstly it's a "play the game, we need the hype" but more like "these comments have importance in itself because we say so". It's similar to meme magic - to say that 4chan memed Trump into office is utterly ridiculous, in reality they didn't. But enough people believed they might have and looked into it and thought maybe they did, that the effect of 4chan became important. A magic trick is about what you think you saw after you leave the theatre. edit2 - and even my comment reinforces the effectiveness of the strategy just by commenting on it!
psswrd12345 6y ago
Never make the mistake of confusing luck for genius.
WhompingWindows 6y ago
Can you clarify: would you truly consider someone who works at FAANG as "middle class" and making "peasant money"? HN, let's not lose our perspective. There are millions of "essential" workers, like daycare, teachers, elderly caregivers, laborers, etc. that didn't get a lick of compensation for their risky labor in COVID times. Many of these people had NO choice to stop working and NO choice to work from home. These are truly essential individuals who work for minimum wage or less, while truly making "peasant money" here.
tcbawo 6y ago
I won the lottery and you can too! https://xkcd.com/1827/ https://xkcd.com/1827/
jansan 6y ago
Tip from an old fart who made some money a while ago: Stay humble. Life is long and there are ups and downs. Keep living costs low and you will live a happy life.

taway0125210 6y ago

Here's my account, that might be survivorship bias. I also traded tech stocks and cryptos and was able to significantly beat the market on the former and quit (also from Amazon) a few years ago. I invested in NVidia after recognizing GPU shortages due to ML continuing hype. I switched to AMD after recognizing their Zen CPUs are slowly beating Intel. I switched to TSMC after realizing their accomplishments are significant part of M1 and Ryzen advantages. My stock portfolio's growth is over +50% yoy over last five years on average (geomean). The way I explain this to myself is that trading firms focus on economic fundamentals, which can not show upper hand in a specific technology. They are trying to recognize the later, but it requires understanding tech news articles, and best NLP AI methods are not there yet, whereas our brains can handle that task, especially if it is withing our own expertise. If that theory is right, you can beat the market, but you have to be real expert in the area you are trying to trade in, and probably a few linked areas too.

shouldiquitamzn 6y ago
So funny you say this. The two stocks that got me started were Shopify and data dog. I knew datadog was a great freshly IPOd cloud play, Shopify would boom due to the lockdowns. So I put a ton of money in Shopify calls at the March bottom, then rolled the profits into Data dog, then Apple and so on. It was absolutely my understanding of e-commerce that gave me the confidence. Also how lockdowns related to the cloud. It’s only been lately that I’ve taken shots on MEME stocks. Deep tech understanding, scouring cathie woods ARKK etf has been very profitable. But I think from a broader perspective, I’ve made huge leveraged bets on VTSAX/SPY/IWM on stimulus news. Very obvious that financial assets will inflate with each extra fed move.
- taway0125210 6y ago
  I am keeping my bets conservative. These were all long term (1+ years) except a few option trades. Consider this a hedge against the very phenomenon discussed in this article.
ralfd 6y ago
Can I subscribe to your newsletter? What is the next trend in your opinion?
m3kw9 6y ago
So what’s next?
m3kw9 6y ago
I have the exact same thought, quants and AI cannot predict long term, and that’s where to compete. Didn’t think I’d find similarly thinking people out here, where do I find more to talk to?!
thrwyoilarticle 6y ago
The market's complete lack of pricing-in the amazing reviews Zen received was enlightening.
- ragazzina 6y ago
  The last few months I've often wondered if the same thing is happening with the M1.
tootie 6y ago
Trading firms do not focus on fundamentals. They have teams of industry experts doing the exact same kind of research you were doing.
imtringued 6y ago
If trading firms merely focused on economic fundamentals then we would see far less bubbles. You have to abandon economic fundamentals to cause and take advantages of bubbles and an economy built on bubbles is not healthy. It's built on mania.

flakeandgray 6y ago

Congratulations to you! Can I ask where/how did you learn to do what you did? Did you first learn general stock market investing or did you skip straight to options? Any advice and/or resources would be much appreciated. Thanks!

deleted 6y ago
[deleted]

abbbccdefd 6y ago

Yeah, running Hedge Funds like Melvin capital is where the real money is. They get a 30% cut of profits they make from their clients money and they have around $10 billion under management. They were up 50% last year so the management team took home ~$1.5 billion. They're deep in the red, down 30%, first month of 2021, due to the systemic risk they took on from all their bloated retail store short positions, but that's okay because the money they're losing is their clients and not theirs. When they blow up, they talk to their media contacts and lay the blame on retail day traders ganging up on them and start a new fund.

leowoo91 6y ago

You might got lucky or not, but your comment is very dangerous for the people who have no idea and haven't been in the field. FAANG compensation is not peasant to billions of people, so please don't do that.

shouldiquitamzn 6y ago
I made the money myself, I didn’t get lucky. Edit: The money was made over a 100 trades
- edgyquant 6y ago
  Yes you did get lucky on an option play
  - shouldiquitamzn 6y ago
    I made over 100 trades
    - mempko 6y ago
      What's your return distribution look like on those trades? Pareto?
    - edgyquant 6y ago
      I make winning option trades as well, as a hedge against my portfolio. If you made a disproportionate amount of cash of an options play it was luck. I’ve done it before, made almost 1500% on an AGFS play when I saw a consistent downtrend in it. But it was luck and nothing else.
      - totalZero 6y ago
        This is a really, truly bad take. Option prices move every day. There do exist, in fact, some people who are very skilled at making money trading options. Some people do it for a living with rich people's money, and many of them have the same skillset/education as the general HN audience. If this guy actually made millions over the course of dozens of trades, it makes more sense to let him talk than to downvote him and tell him that he's just an aberration of probability lol. Like, what do you gain by that? If he's lying, humor him and enjoy the conversation. If he's telling the truth, pick his brain.

in3d 6y ago

You’re a lottery winner, congrats. People made money during the tulip mania also. You’ve given money to the Wall Street, not taken it away. The biggest winners are companies like Robin Hood and hedge funds who buy their order flow data and hedge funds that take advantage of the bubble to play this, while the losers will be small investors who were late to the game and believed the bullshit about how it’s anything more than a bubble.

smabie 6y ago
that's not how it works. Email me if you are genuinely interested in the how the institutional investors and market makers fit into this whole ecosystem. I'm tired of explaining market structure/incentives on HN. hint: wall st money was lost on gme, not made. Market makers got killed trying to hedge those deltas, over and over again (it is impossible to statically hedge an option you have sold with a long/short position in the underlying tho in some cases like far ITM options, you can pretend like you can because the options delta is 1)
- sammy533 6y ago
  Can you link your comment where you explain it?
shouldiquitamzn 6y ago
No I made this money myself. In any time in basically the last decade, if you leveraged up on the SPY or QQQ, you are now retired. People are too risk averse, they will be stuck in a job forever
- bitcoinmoney 6y ago
  How do we replicate your success?
  - kapp_in_life 6y ago
    QQQ is a good idea until you hit a bear market. So live through 10 years of consistent positive gains every year in the market and you too can leverage QQQ to make millions. Taking lots of risk is good in a bull market.

jameshart 6y ago

You played a game, you played it well, and you won. Well done. But don't pretend that that means everyone can do it, because patently they can't: you won your bets, a bunch of other people lost theirs. No value that wouldn't otherwise have been created got made, you just shifted the balance of how the rewards are distributed in your favor, and away from someone else. As a system for distributing the benefits of economic production, allocating it to the winners of a complex iterated social game seems suboptimal. Like if we used 'Among Us' tournaments to distribute food. But hey, glad it's working out for you.

glohbalrob 6y ago
same can be said about just about anything, no? running marathons, startups, cooking a great dish... No one on WSB is saying its for everyone, thats why they talk trash about themselves.
- deleted 6y ago
  [deleted]
- ausbah 6y ago
  you can learn to run a marathon, cook, etc. with a much higher chance of success then something like trading stocks or to a less degree starting a business. the latter pursuits have a much more volatile environment that rewards luck > skill
  - koheripbal 6y ago
    Investing is not luck. It's luck if you make just one or two trades. In the long run, statistical iterations (that you have modeled/researched correctly) will give you positive returns with a very high confidence. Situations like in this post are obviously not that. I have a trading strategy that I execute over hundreds of trades per year based upon financial modeling and financial statement analysis. There's a little luck involved, but over many trades, the luck aspect cancels itself out. It's like rolling the dice. If you bet on getting a certain number, and roll once, it's luck. If you bet on averaging a certain number and roll 1000 times, there's virtually no luck at all.

dingaling 6y ago

> demonizing young middle class Reddit investors They're not investors. Their money doesn't help the company.

L-four 6y ago
Yes it does, the company can do a stock split and sell more shares.
kelnos 6y ago
Not directly. But driving up a company's market cap can make its stock more attractive to a potential acquisition target. Or it can simply sell shares of itself at the new, higher price.
dmurray 6y ago
At least in this case, GameStop has filed to raise up to $100,000,000 through an ATM offering (selling shares to the public) [0]. So yes, the recent activity does help the company, in so far as GME is a company that can be helped by getting its hands on more cash. [0] https://www.sec.gov/Archives/edgar/data/1326380/000119312520312805/d67321d424b5.htm https://www.sec.gov/Archives/edgar/data/1326380/000119312520...
- viraptor 6y ago
  Did that go through? Releasing new overpriced shares while the price is being obviously raising unrelated to the company performance sounds super dodgy.
  - thrwyoilarticle 6y ago
    Worked fine for Tesla and Apple.
  - dmurray 6y ago
    They planned to sell them before the current rally (the document is dated December 8). They haven't released details of how many they sold, or on what dates. It's not clear what view the SEC would take if they fast tracked an ATM offering now. Hertz were told to knock it off, but they were literally trading in bankruptcy. There's a pretty good argument to be made that issuing more shares is if anything the responsible thing to do to in response to increased demand, since it would help to correct the anomalous price rally.

shrikant 6y ago

Since this comment is one of the top threads, I'm just going to re-post my earlier comment from one of the sub-threads: This comment about having made millions leveraging on SPY and QQQ over the course of 100+ trades doesn't check out, given that a few days back, this commenter created this throwaway account to complain about finding it hard to quit their job at Amazon because the pay is so good. https://news.ycombinator.com/item?id=25878201 https://news.ycombinator.com/item?id=25878201 IOW, they're lying for Internet points.

irjustin 6y ago
Perhaps this guy isn't real, but there's plenty of guys on WSB who have been able to do it. They're the dream to achieve. I admit I'm jealous myself because I missed out on great buys like NIO, PLTR, GME. I'm paying attention now, but I'm worried I missed the boat already.
- Miner49er 6y ago
  In my experience there will likely be another boat (or yatch). Back in 2016/2017 the meme was AMD, then there was TSLA and then GME, and lots of smaller ones in between. There will be more.
  - neuronic 6y ago
    Not if the boomers activate the SEC. All it takes is one reddit ban of WSB. People won't just reorganize somewhere else, it never happens. Sure, a bunch of them will be somewhere else for 4 months but then the movement is dies because most WSB users will stick to reddit long term.
    - Miner49er 6y ago
      True, but I don't think that's likely to happen.
thinkingemote 6y ago
As the article points out, it's about reality being controlled. In this case the user wrote something to change reality for their benefit. The change they want is for more people to play the wsb game. And for more people to believe that the game has many winners. The mistake is that their message was untruthful, it was an exaggerated attempt to create hype. Or. It was a user lying to make them get attention on the internet and feel better for a short amount of time, but I like my first idea as it's directly called out in the subject we are discussing. Thanks for unveiling it! edits - I think its also like if you say something is important enough, it becomes important. So if wall street are still debating if wsb is or isnt actually relevant it means they already are. So the message is twofold. Firstly it's a "play the game, we need the hype" but more like "these comments have importance in itself because we say so". It's similar to meme magic - to say that 4chan memed Trump into office is utterly ridiculous, in reality they didn't. But enough people believed they might have and looked into it and thought maybe they did, that the effect of 4chan became important. A magic trick is about what you think you saw after you leave the theatre. edit2 - and even my comment reinforces the effectiveness of the strategy just by commenting on it!

psswrd12345 6y ago

Never make the mistake of confusing luck for genius.

WhompingWindows 6y ago

Can you clarify: would you truly consider someone who works at FAANG as "middle class" and making "peasant money"? HN, let's not lose our perspective. There are millions of "essential" workers, like daycare, teachers, elderly caregivers, laborers, etc. that didn't get a lick of compensation for their risky labor in COVID times. Many of these people had NO choice to stop working and NO choice to work from home. These are truly essential individuals who work for minimum wage or less, while truly making "peasant money" here.

tcbawo 6y ago

I won the lottery and you can too! https://xkcd.com/1827/ https://xkcd.com/1827/

jansan 6y ago

Tip from an old fart who made some money a while ago: Stay humble. Life is long and there are ups and downs. Keep living costs low and you will live a happy life.