News for hackers. Stuff that matters.

A comment on Reddit's Stock Threads Become a Must-Read on Wall Street. Parent comment

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by paulpauper on Sunday October 11, 2020 @07:45AM (#24745134)
I was on some Facebook thread and some people were posting screenshots of how they lost 100% during the pandemic... Like $20,000 -> 0 in a matter of weeks. It was extraordinary. They were all using WSB and doing extremely foolish options trades.

Right, but there are also traders who have made 10x or more. Many have turned a few thousand into 5 or 6 figures. You have to find the right strategies and traders to follow. There are traders who demonstrate skill, by consistently making profits. This involves optimal position sizing and optimal call option duration and strike prices and other factors such as momentum.

[ Parent | on HN ]
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by timoth3y on Sunday October 11, 2020 @07:53AM (#24745173)
> There are traders who demonstrate skill, by consistently making profits

With a large enough group consistently making profits would not necessarily be a demonstration of skill. Even if the returns were completely random several traders would constantly perform well above average.

[ Parent | on HN ]
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by levesque on Sunday October 11, 2020 @08:17AM (#24745284)
This is why this game is so dangerous. Also self reporting introduces bias too (biggest winners likely to report, everyone else not so much).
[ Parent | on HN ]
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by wgerard on Sunday October 11, 2020 @09:08AM (#24745509)
To be fair, I think WSB bucks this trend a little. People report the huge losses there, and it's part of what makes it so interesting.

In fact, I would argue that the most well-known posts are often from people losing huge amounts of money, eg. "Guh".

[ Parent | on HN ]
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by WhompingWindows on Sunday October 11, 2020 @08:31AM (#24745344)
How do you differentiate those skillful traders from the lucky ones who somehow managed to beat the house despite being an amateur from WSB?
[ Parent | on HN ]
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by sokoloff on Sunday October 11, 2020 @09:35AM (#24745662)
IMO, the only reliable way is to watch them over a 50-plus-year period and look backward.
[ Parent | on HN ]