Michael Wursthorn
speaker
1,567 appearances
29 recordings
1 series
first heard Jul 2017
last heard Nov 2021
Michael Wursthorn’s voice in public audio — every appearance, attributed to the second.
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Appearances
But that's not to say we're seeing big swings in individual stocks just based on retail participation.
Companies like Hertz, Nikola, Tesla too, for instance.
I mean, a lot of those huge gains that they've seen over the last several months of this year have really been at the hands of retail investors.
So while
The jury's still out on whether or not they're driving the overall market action beyond just sort of the peripheral gains that we've seen over these last several months.
It's really clear that they're driving big volatile price swings in individual stocks right now.
And that's something that's going to likely continue for as long as this environment persists.
Well, so that gets us into when people do some more sophisticated trading strategies.
So when you buy and sell stock, say you buy a stock for $30, the chances of that stock going to zero pretty fast is very small.
I mean, that stock can lose a little bit of money, but you're still going to have some money of what you originally invested.
where we've seen some of these traders get into a lot of troubles when they're investing in some highly risky stocks, like Hertz, for example.
That was a company that was going through a bankruptcy process, and you saw the stock going up, in some instances, double-digit percentage points, only to fall back down again.
And in a lot of these bankruptcy situations, those stocks get rendered down to zero.
So that's been a big risk for investors as they look at these opportunities to try to get the potential for big gains.
But where we've seen even more issues is with options trading.
Now, Robinhood has also been sort of a forerunner in the sense that they made options a lot more accessible to average investors than ever before.
So the more simple options trading strategies where you're just buying a contract in some cases in terms of putting a call on a company –
That's relatively safe.
Where people do more sophisticated strategies like these multi-leg spreads where you can lose more than you put in, that's where we've seen, in at least one case, a very tragic circumstance arise where a trader thought he was down three quarters of a million dollars because he didn't really understand how the options trade worked.
And because of that, he ended up taking his own life.
Showing 381–400 of 1,567 · page 20 of 79
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