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Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Fri Feb 21, 2020 8:30 am
by dualstow
https://finance.yahoo.com/news/free-sto ... 00721.html
While it’s tough to know what’s causing what -- bull markets are fueled by new converts but also lure them -- trading volume at online and discount brokers has exploded. TD Ameritrade Holding Corp., which started offering free trading in October, has seen million-trade days multiplying at a record pace.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Fri Feb 21, 2020 9:02 am
by Cortopassi
Hmm, never thought of that angle. Here I am wanting to limit trading to yearly or less rebalancing, and others are getting enticed by zero commissions. Years ago I certainly would have been enticed into losing even more money that way.

Maybe just one other indicator of ringing the bell at the top.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Fri Feb 21, 2020 1:53 pm
by Tortoise
Cortopassi wrote: Fri Feb 21, 2020 9:02 am Maybe just one other indicator of ringing the bell at the top.
Yes, I think so.

The other day, a coworker told me about a guy at my company who invested $1M in Tesla stock when it was a little over $200/share, then recently cashed out and retired after it skyrocketed.

These sorts of get-rich-quick stories about the stock market, where you hear about people retiring or quitting their day jobs due to sudden success in the stock market, seem to pop up in conversations with random people during the final phases of stock market bubbles.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Tue Feb 25, 2020 12:42 pm
by Kriegsspiel
21 FEB: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

25 FEB: S&P 500’s 5% Rout Hammers Mom-and-Pop Investors Who’ve Piled In

:P

Thankfully, I managed to sell a fair chunk of stocks in the days leading up to these big drops.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Wed Feb 26, 2020 8:30 pm
by ppnewbie
Not sure but I’ce heard that algorithmic trading is the majority of the trading volume everyday.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Sat Feb 29, 2020 9:35 am
by pmward
Along the same lines: 90s style retail day traders are making a comeback, especially in options markets https://www.bloomberg.com/news/articles ... ded4b883a5

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Sat Feb 29, 2020 8:19 pm
by Kbg
ppnewbie wrote: Wed Feb 26, 2020 8:30 pm Not sure but I’ce heard that algorithmic trading is the majority of the trading volume everyday.
By far.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Sun Mar 01, 2020 2:58 am
by mathjak107
only 10% of the daily trades are stock picking . 90% is automated trading with no human input .

most pro's use margin . all software is designed to lower leverage when margin calls can happen and raise leverage when the fear is less . so basically selling leads to more automated selling ..like an object that stays in motion until it hits something so do stocks

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Sun Mar 01, 2020 11:11 pm
by boglerdude
Why is margin legal. Does it help the economy?

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Mon Mar 02, 2020 10:08 am
by pmward
boglerdude wrote: Sun Mar 01, 2020 11:11 pm Why is margin legal. Does it help the economy?
Take away margin, watch the stock market and the economy implode, haha.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Wed Mar 04, 2020 1:39 pm
by Kbg
boglerdude wrote: Sun Mar 01, 2020 11:11 pm Why is margin legal. Does it help the economy?
Why are loans legal?

Because people like to borrow money and people like to make money lending money.

Margin is nothing more than a collateralized loan.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Wed Mar 04, 2020 1:59 pm
by Xan
Kbg wrote: Wed Mar 04, 2020 1:39 pm
boglerdude wrote: Sun Mar 01, 2020 11:11 pm Why is margin legal. Does it help the economy?
Why are loans legal?

Because people like to borrow money and people like to make money lending money.

Margin is nothing more than a collateralized loan.
Interest-bearing loans weren't legal, for quite a long time. Still aren't among Muslims. Aristotle spoke extremely poorly of it. We may have rushed to judgment with the sudden reversal.

Re: Mom and Pop Are On Epic Stock Buying Spree Fueled by Free Trades

Posted: Wed Mar 04, 2020 8:00 pm
by Kriegsspiel
If memory serves, European economies improved when they didn't have to rely solely on Jewish lenders or quasi-loans.

I think it goes without saying that nobody should be trying to emulate the Muslim world.