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Excited traders rise to “meme stocks” when cryptocurrencies fall


New overnight Markets, which are experiencing shocks in rapidly declining markets, are reaffirming their dominance as popular stocks rise as cryptocurrency prices dry up.

In January, amateur investors flocked to a number of online organizations to remove shares in the company, including GameStop console retailer AMC Entertainment. Now, after a pause, some of that energy is back.

AMC shares have risen more than 150 percent since bitcoin began to shake earlier this month, և more than doubled this week alone, according to Refinitiv. GameStop, one of the top-rated retailers, grew 26 percent this week.

Expert analysts note that the repetition shows that the amateur charm in the markets may exceed the social curbs brought in last year to control the coronavirus epidemic. Some now consider it a stronger trend, which has a significant impact on the investment field.

“Retail [traders are] creating their own momentum and following it. “We have this new dynamic where retail is leading, and you can’t say the retailer knows last,” said Dan Pipitone, co-founder of TradeZero, a US-based brokerage firm.

Although markets have been relatively soft in recent weeks, record-breaking instances of stock-preferred cryptocurrency assets have hit record highs since the blockade began last year.

After the January wave, some excitement spread in cryptocurrencies. But bitcoin prices, two of the most popular digital coins, have fallen since early May. When the air came out of that market, it seemed as if it was pushed back into the stock with retail interest.

The Goldman Sachs stock index is most often cited on the popular r / WallStreetBets Reddit page, which has become a watering hole for daily traders and some big money managers, gaining 20 percent this week, the bank said.

Some of them are displayed in the option markets, which traders can use to place bets on the direction of the shares. According to Bloomberg, since the beginning of trading on Tuesday, the number of open calls at AMC – bets, according to which shares will rise, has increased by 40% to 1.8 million. Retail purchases of AMC shares closed at $ 209 million on Thursday, up 273% from the previous week, according to Wanda.

In the past, day traders tended to focus on specific topics or areas of stocks. But the new generation was trying to “roll in the various bubbles of assets” in world markets, says Anda Acomo Pierantoni, an analyst at Vanda Research, which tracks retail investment flows. “They are investing in assets with strong momentum, high asset potential and supportive media flow,” he said.

TradeZero’s Pipitone added that “these traders are not married to any industry, they are married to style.”

Despite the relatively small share of individual investors in the market, younger investors who sell for less money have a greater ability to raise prices on stocks or stocks.

“They do not have to transfer a lot of money, but they use a lot of derivatives,” said Pierantoni. Derivatives, such as the use of stock և cryptocurrency options և futures, allow sellers to increase their potential profits և the ability to send assets moving upwards.

“You get speculative foam pockets. “Jordan then moves on to the next brilliant subject, which leads to a series of ‘corrective corrections,'” said Liz Ann Saunders, Charles Schwab’s chief investment strategist. He stressed that the “buzz of interest” in the corners of the market by the “new mining trade” has been evident since the summer of 2020, when investors are accumulating large tech stocks.

It is expected that this style of investing will be maintained among people aged 18 to 40 years. “You have old schoolboys who say this is not going to be big trading, but there is a different psychology among young investors,” said Bob Courtwright, CEO of DriveWealth, a technology brokerage firm.

“This is a generation that grew up with video games. They are very smart, very fast. That is why cryptocurrencies are so exciting for them. “They really like instability.”

The other members of the investing community do not agree; they expect these super-persuasive traders to eventually fall into the category of investors looking for longer-term capital appreciation instead of higher or lower shocks.

This month’s “crypto flood” was the logical next step for retailers losing interest in the markets. “That meme seemed to be running its course,” said Steve Sosnik, chief strategist at Connecticut-based Interactive Brokers.

Still others see the rise in the retail sector as a result of the epidemic, the beginning of a new potential investment force.

“Everyone is trying to tell them ‘it’s going to end badly’ or ‘this is not a good way to do business,’ I think it basically doesn’t make sense,” Cortright added. “They create new ways of thinking about investing.”



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