WallStreetBets

WallStreetBets is a subreddit in which participants discuss stock and option trading. It has become notable for its colorful and profane jargon, its aggressive trading strategies, and for playing a major role in the GameStop short squeeze that caused losses for some US firms and short sellers in early 2021. The subreddit and its participants' aggressive trading strategies primarily revolve around highly speculative trades and leveraged options trading. The WallStreetBets subreddit was founded in 2012 by Jaime Rogozinski, who has since been removed as a moderator of the subreddit by Reddit administrators.

Participants in the subreddit often consider their trading practices, which tend to ignore fundamental investment practices and risk management techniques, as little more than gambling. However, the growing popularity of no-commission brokers and mobile online trading has, in turn, grown the popularity of communities such as WallStreetBets. Despite the inherent risk in their trading strategies, many community members on WallStreetBets see day trading, often considered to itself be a high-risk type of trading, as a chance to improve their financial conditions.

Another trading strategy common on WallStreetBets is the trading of meme stocks. These are stocks that gain popularity through the community and related social media platforms, often as jokes and as irreverent or otherwise silly investment strategies. The subreddit is in part responsible for making the idea of meme stocks popular and for driving a relative craze in these stocks, as identified by the community, during the COVID-19 pandemic (when many people were locked in their homes and were searching for alternative income and a way to spend their time).

The WallStreetBets subreddit is also known for its unique language, which is often considered to be juvenile. The language includes elaborate use of emojis, such as strings of rocket ships to signify how the group wants to trade stock up, or users encourage each other to stay strong through big market swings by encouraging them to have "diamond hands" through emojis. Commenters often refer to themselves as "degenerates" or "apes," and posts refer to any payoffs from the stock moves as "tendies" in reference to an old joke from 4chan stories.

Other common slang in the subreddit includes the use of "stonks" to refer to stocks; "gay bears" for those who expect a stock to decline, for stock shorters, or as a general insult; "DD," which originates from due diligence in the analysis for a potential trade; "bagholder" for an individual whose position has dropped in value, especially in reference to a severe drop; "paper hands" to refer to an individual who sells their positions at the first sign of loss; and "go YOLO" or wager an entire account balance on risky option plays.

With the COVID-19 pandemic keeping many people home, and the rise of no-commission broker platforms and mobile applications, the WallStreetBets subreddit grew in 2020 through into 2021. This, with many feeling disaffected at the loss of income and with a certain desperation, led to the GameStop bet in the WallStreetBets community. This started with a user in the community arguing that GameStop was underpriced for the market; starting as a joke, the community began to invest in GameStop.

However, in part driven by the above feelings, the community began to push the price of GameStop up, especially as the price movement began to negatively impact the institutional short-sellers. This was seen as the "little guy" or "David" fighting with "Goliath" and was seen as the first time the retail investors could get back at the institutional investors, who are often seen negatively by the WallStreetBets community, especially as day traders such as those in the WallStreetBets community are typically held in contempt by professional traders.

While GameStop was the focus of this move on the community, there were other stocks, including AMC and Nokia, the community was investing in and driving the price up of these stocks, which the community was convinced were undervalued by institutional investors. However, these movements were cut short as retail investing application Robinhood cut off sales of these stocks on the platform, which caused outrage toward the company from the community. While Robinhood's move did not end the GameStop investments, it did dull the movement's momentum; a year later, the GameStop stock price dropped, but not to the lows it was at in 2020.

After the WallStreetBets Reddit community became a household name during the GameStop investment period in January 2021, the Reddit community has grown to around 10.6 million users. Further, the board's moderators have been criticized for what many have seen as inconsistent enforcement of rules and a growing sense from the community members that the moderators are playing safe for fear of angering Wall Street and regulators. Further, the size and popularity of WallStreetBets has made it susceptible to bad actors attempting to create "pump and dump" schemes through conversation spamming and generating artificial interest in a specific share. This has led those who have moved on from WallStreetBets to refer to the subreddit as "the melted sub."