Monday, 27 June 2022

Has 2021 Changed the Retail Trading Market?

GameStop short squeeze: What pro traders, the Reddit crowd and regulators  may do next

The start of 2021 brought a lot of trading news to the wider market particularly to those who may not have otherwise been interested in exploring it – it can as one online community attempted to battle against Wall Street with one stock – GameStop. In many online spaces becoming more widely known as the GameStop short squeeze, it had managed to show where potential problems were in the trading market, particularly as a retail trader, but has it changed the retail trading market as a whole?

For those that hadn’t been involved before, it had certainly been a period of time for exposure by showing how the trading market in itself was a big gambling market with no guarantee of return, more in line with the big betting sites not on gamstop like those found here – but it also showed how outside influence could have a big impact on the success of the markets too. The big change came as one of the bigger trading platforms for retail users, Robin Hood, blocked buys on the GameStop stock for one night at a time where many believing there had been huge change happening and had been in some way responsible for the following drop in price and the struggle that many retail traders found afterwards.

Investigations have since been launched into the whole process – particularly in whether or not certain big figures in the movement had an impact on the stock price as investigations have been launched into market manipulation to determine whether or not it was more than just the changes to platforms like Robin Hood that had an impact too. This will likely be a long-drawn-out process so all information may not be available for some time yet but could certainly lead to some more permanent changes.

Given that the squeeze is still happening somewhat with many on the popular social platform of Reddit holding their own position on GME, alongside some other stocks too, it has opened an opportunity for many others to follow and has given some the confidence to explore the trading markets themselves even if some are posting big losses. Many will likely now keep their eyes on the market to see where the next big opportunity could come from but given that trust has been lost in some platforms, other retail platforms are certainly starting to pick up the slack and benefit from the bad reputation others may have created – whether or not this will lead to a more permanent change for new traders is yet to be seen, but it’s certainly an interesting change, nonetheless.

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