Zane Bannink, a high school student in Wisconsin, said he has used the Robinhood stock trading app since he turned 18 two months ago. To date, it has raised over $ 800.
Jude Folmar, a 19-year-old college student in Dallas, said he has been trading stocks since he was 13 under a custody account his great-grandfather helped him with founding. He has earned over $ 22,000.
And Liam Gavaghan, a 21-year university student in Kingston, Ontario, started trading about six weeks ago. He now spends hours scanning Reddit message boards with a focus on finance and talking to his friends about potential trades in Discord’s voice chat room. He has made more than $ 9,000 on an initial investment of about $ 1,900 – money he received as part of Canada’s COVID-19 incentive relief package.
“It’s dangerous as hell,” Gavaghan said of trading stocks. “But holy cow, it’s almost like getting high. ”
In a world of high finances, these three entrants may have been outliers. No longer.
They are part of a group of young people – especially males – pouring into the digital trading floor in recent years, raised on social media and desperate to educate themselves about stocks and trading quickly using a number of apps serviced to Generation Z. In just a few. In a matter of weeks, this new group of retail investors has completely outsourced some of the most professional traders by coordinating across social media, forums and chat rooms to share sections of GameStop otherwise, pushing the stock price for the video game company skyrocketing while leaving several short-selling sophisticated sellers holding the bag.
Their reasons run the gamut: Many of them are inexperienced capitalists, seeking money. Some think they are good thinkers, who would be 99 percent who were too young to be involved in Wall Street at the time of the move. There are some nihilists who just want to overthrow a system that they feel is hard against them from the beginning. Then those kids just do it “for the lulz. ”
What many of them have in common, however, is that they regularly buy and sell subscriptions, directly from their smartphones, while posting their benefits, or “ tendies, ”to online forums, all open for peers to see. They often look at trading as a kind of video game, like running a new high score on a puzzle app or collecting stuff like that on an Instagram post.
Their impact on the market has been less than average. GameStop stock has seen brutal trends, with daily percentage increases jumping into the triple figures. Former investors had been under pressure to shorten the stock – bet that the price would fall – they almost broke at least one hedge fund. Elon Musk, the richest man in the world, has made the Redditors group a célèbre cause, backing them up in a series of tweets last week. At the same time, many Wall Street analysts fought against the traders, arguing that they had mocked the markets.
The blowout against them is even done for weird beds in Washington. Politicians on both sides of the aisle briefly agreed in defiance of Wall Street’s response to the young traders.
All the while, the band of unscrupulous traders continued to laugh – all the way to their digital banks.
“I’m sitting here on Reddit, watching the numbers grow up and up,” said Gavaghan, reflecting on the huge gains made by GameStop stock over the past few days. .
The young traders are motivated, and empowered, by technology. Companies like Robinhood, a trading app that specifically targets marketplaces, advertise across social platforms, attract young consumers without trading costs, instant access to instant investments and a fun interface , easy to use. On Thursday, Robinhood said it was raising more than $ 1 billion to address an extremely high trade volume.
And they turn to online communities to talk stocks and strategies to each other, on platforms like Discord and Reddit, specifically on the r / WallStreetBets forum. The deceptive, heavy-handed group discusses stocks and talks about crafts in a way that feels indigenous to many high school and college students.
Daniel Uribe, 21, a senior college student in San Diego, said he discovered WallStreetBets five months ago after a YouTuber following him, named Big Boss, made a video about the group.
“I wanted to be part of the excitement,” Uribe said. He figured out that maybe he could make some money too. “There’s a lot of stuff that the older generation doesn’t even realize exists. We have different ways of making money that they don’t understand. ”
WallStreetBets is not for all young people. The demographics of the Reddit forum, which now has over 6 million people, are extensive and include jobless boomers, avid millennials and hyper-online kids. However, the companionship in the community is something that many young traders said they were attracted to.
The forum has its own language. They refer to winning as “tendies,” and it is customary to celebrate great gain by eating chicken tenders. WallStreetBets investors recommend those who have so-called diamond hands, meaning they keep their stock or keep investing even when the price of the stock falls.
Diamond hands are seen as a kind of heroism, even though it appears carelessly, and investors point to such an arrangement with diamonds and handmade emojis in their comments. “Paper hands”, on the other hand, are seen as a sign of weakness or bad cowardice, and indicate a willingness to fold or sell stock after a dip. This crowded lingo spills over the web to YouTube, TikTok, Snapchat and more, becoming memes within memes.
Louis Weimer, 20, a college student in Pittsburgh, signed up for Robinhood as soon as he turned 18, as did many of his peers. He liked that he did not raise large taxes and allowed him to trade small stocks, a key for a college student on a small budget. He donated $ 200 he raised from working at a grocery store and bought stocks at well-known companies, such as Apple and Microsoft.
WallStreetBets had been on its radar from the beginning. He came across the community on Reddit and researched on and off to track trades. Weimer said he and his friends often talked about stocks. “My two friends are here at school, they have investment accounts and we talk about our trades all the time,” he said.
Like many traders of his age, Weimer was never formally taught about the stock market. His information is taken from the internet and online chats. He learns by watching YouTube videos on how you can multiply a package or when to buy time.
Bannink, a Wisconsin high school senior, said he had friends who had traded across high school under their parents’ accounts, posted about gains and losses to Snapchat and Instagram, and wanted to get into the action.
With Robinhood, “you can put it on your home screen and switch between Instagram and Snapchat; it doesn’t feel as bad as it used to, ”he said. “It’s just an app you open on your phone, it has graphs, and numbers, and it’s easy to understand and learn quickly. ”
Folmar, the 19-year-old in Dallas, said many miners had found ways to overcome the age restrictions on the trading apps.
“It’s very easy to get over that 18-year requirement,” he said. “You can take a picture of your mum or dad’s social security card and set up an account. ”
Many young traders get their information from the TikTok video app, where financial advice and stock trading recommendations often go viral, reaching tens of millions of users.
“TikToks suggests which stocks are good to buy, explains what’s going on with GameStop, and explains the stock market as a whole, has come up on the page for you ‘, ”Bannink said. “When I don’t understand something going on I just hop on YouTube and watch a video and there are almost always a lot of videos that explain it very clearly.”
“In the next few years, with more of us turning 18, a higher percentage of people are going to start investing on their own,” he said. “You can download an app and put it next to the other apps you run on your phone every day. It’s a lot easier to just do things on your own. “
Bannink said similar traders were different from day traders of the past. Losing all your money, after all, will last much less unless your general lifestyle changes and you are still living at your parents ’house.
“We are more of a fearless group of traders,” he said.
Many young users on WallStreetBets forums have complained that no matter what they do, the deck is always stacked against them. Many say they are trying to expose the entire financial system for the game that it is. Stock meme is part of that. Some hype up modern stock or trade it as a stunt.
“You know how we have really popular memes and everyone uses them for a while, then they crash?” said Zaid Admani, 29, financial creator of TikTok in Texas. “Those stocks are like that.”
While most Gen Z traders were too young to recall many details of the 2008 financial crisis, they saw the impact it had on their families. Some have seen their parents lose their jobs or their homes, and have tracked down their older ones as they have struggled for years to meet heads. They are aware of income inequality and the differences in access to wealth in America.
“Everyone my age has grown up with different kinds of understanding of money because of 2008,” Weimer said. He said that he and others his age felt sorry that they had never even had a chance to lift a leg.
“It should be a level playing field,” he said. “Anyone can do their own research, it’s very fair, so why should the system be so favorable to people with more money?”