The stock market has changed – with brokers offering zero commission trades, more people have access to the stock market than ever. Pair that with a new generation entering the market, and apps like Robinhood designed to encourage people to make more trades more often, meme stocks are here to stay.
What happened in early 2021 with GME? And how might it fundamentally change the stock market and what does it mean for retail investors and hedge funds? Here are some podcasts that help explain what it all means.
During quarantine, with access to zero commission trading and a sudden abundance of time, many people decided to try their hand in the stock market, leading to a large influx of so called “retail traders” – non-professional traders using their personal money to buy stocks from home, often assumed to be new to the stock market. Sway, from The New York Time, discusses what aligned to allow the influx of new investors in the market, and if meme stocks really do benefit the retail trader.
The forum that started it all was the subreddit /r/WallStreetBets – self described as “Like 4chan found a Bloomberg Terminal.” The subreddit is a place for people to anonymously talk about the bets they were taking in the stock market (before GME, this would usually this would be YOLO’s on SPY index options) as well as a popular place to share their massive gains and losses. The Indicator from Planet Money has the low down on the culture in the place where the hype train started.
WallStreetBets has been talking about short squeezing the hedge funds on GME stock. But what is a short squeeze and how does it happen? Money For The Rest of Us explains.
Make Me Smart with Kai and Molly work through their rundown of retail traders, GME, and wall street – laying out their theory for why the short squeeze on GME was the first true meme stock to go viral.
Who is Robinhood’s actual customers? No, not retail traders – hedge funds! ChooseFI breaks down the irony in their business model, shady design, and default settings on Robinhood that get retail traders into trouble and give hedge funds a leg up.