Best App For Stock Market News Reddit

Best App For Stock Market News Reddit – After investors rocked the market last week in the video game chain’s stock market war, we explore the prospects and pitfalls of the apps they use.

Shares of the American video game store GameStop were trading for just $3.25 a year ago, and reached $482 at the end of last month. The surprising wave was created by thousands of free traders organized on Internet groups such as Reddit who tried to beat hedge funds trading against hedge funds in a process known as short selling.

Best App For Stock Market News Reddit

This caused some hedge funds to lose billions of dollars, while traders who cashed in before their shares fell below $100 made huge profits. Many of these speculators use the new generation of stock trading apps such as eToro, Robinhood and Trading 212. Are these services tipping the balance of financial power in favor of the little guy? Here we answer some basic questions…

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There are two main differences between the new trading apps and the old brokers. One is value and the other is market. Apps from Robinhood to Trading 212 get away with offering “free” trading. This is a big departure from the past, when old-fashioned personal brokers cut fees for providing trading services, and even newer online services – called e-brokers – charge a flat fee per trade.

Market access is also important. Until recently, most retail investors focused on buying and selling mutual funds that pooled stocks (stocks), bonds (loans to corporations and governments), and dozens or hundreds of other financial products.

The Trading Guide expands greatly on this. On the one hand, a growing number of companies like Robinhood and eToro allow and even specialize in the trading of cryptocurrencies – digital assets such as Bitcoin, Ethereum and Monero – which are notoriously volatile. For those who want to stick with relatively simple stocks, apps offer financial tools that can increase the risk and reward of a bet, from margin purchases (loans to buy additional shares) to the world of options (betting on a specific stock that goes up or betting on it). drop) a certain amount). If they are right, they get a big reward, but if they are wrong, they are eliminated.

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Surprisingly, it does. According to a new study released by the National Bureau of Economic Research, giving people the ability to trade on a website or on a desktop computer affects their transactions. By tracking people using smartphones and websites to make transactions through two German banks, economists found that transactions with mobile phones lead to risky decisions and encourage people to chase past profits – buying asset markets that are already near the top.

These changes persist even as smartphone traders return to their computers, a market that is now in their pockets and has fundamentally changed the way they view day-to-day trading.

One of the main features of eToro is the ability to “copy” the transactions of influencers on the platform. Why do you want this?

Depending on who you listen to, there are many answers to the question of why you would do this rather than entrust your money to a fund manager with experience, qualifications and legal oversight. Influencers argue that users avoid paying fund fees and that by following influencers who have a real stake in the game – their own money invested in the deals – investors should expect good returns.

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The passive approach argues that if enough retail investors act in concert, they can eventually change the value of the asset, just as GameStop’s stock price rises and falls. Of course, knowing when to sell is more difficult.

Robinhood has been criticized several times for getting users hooked on complicated financial instruments – and then losing a lot of money quickly. Holding stock options: if you buy a stock for £20 and it rises to £25, you will make £5; If it falls to £15 you lose £5. But if you instead invest £20 in 20 ‘call’ options, you guarantee the right to buy the stock for £20, and if the price rises to £25, you get £100 But if you buy an option and the stock goes down even a penny, you lose everything.

The huge risk and reward has drawn criticism that the app is closer to gambling than investing. The fact that some users do not fully understand what they are buying complicates the situation – with tragic results. In July, 20-year-old day trader Alex Kearns killed himself after being shocked by a negative balance on the app that revealed he owed $730,000.

Platforms claim that their overhead is low and transaction fees are obsolete when considering the cost of running a digital marketplace as a whole. Even for old brokers, the main source of income is not what you think: cash flows from client accounts, for example, accounted for 57% of the net income of American broker Charles Schwab in 2018. This is money that customers have withdrawn to Buy stocks but they didn’t use to buy them (or it could be money they earned from buying stocks but didn’t cash out). The broker therefore does not pay any interest, but earns interest on the same funds that he has on his account.

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A more controversial source of income is paying for “order flow”. This will see large market makers – traditional City institutions that profit from the difference between bid and ask prices – paying retail brokers for the right to take orders. The reason is simple: if your job is to buy and sell shares and a large hedge fund asks you to buy £1 million worth of shares, you will immediately be suspicious. What do they know that you don’t? What happens to stock prices after a hedge fund agrees to buy stocks? However, if a retail broker asks you to buy £1,000,000 worth of random stocks picked by various clients, you have no such worries: you will get a good deal on those stocks. In fact, it’s so easy that it’s worth paying them for it.

But in the past week, financial relations have caused controversy. For example, Citadel, a major US it. Market maker Pays Robinhood for its order flow, but another Citadel unit takes a second-party bet on GameStop and invests directly in one of the hedge funds. Instead of screaming when investors discovered an obvious conflict of interest, and now trying to help the poor or save the girl Marion, Robinhood spent a week trying to convince his clients that there was nothing wrong with their relationship.

As these app-based disturbances destabilize the stock market, will they have real financial consequences for the banking system, pension fund values ​​and interest rates?

The GameStop bubble cost some of the biggest hedge funds billions, suggesting that the financial sector must deal with some new form of systemic risk. In other words, the industry is going through the same transition that politics and media have been through for the last 20 years: discovering that large numbers of people coordinated with each other on platforms like Reddit and Twitter can be a powerful force than old institutions.

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It is easy to see how the coordination is much more harmful than a temporary bubble in some “meme stocks” that cost some hedge funds a lot of money: a deliberately coordinated bank run in an attempt to undercut dollar trades. Distributed procurement efforts can have ramifications that affect the real economy. Social platform and news aggregator Reddit made national headlines in early 2021 because it played a major role in the volatility of “meme stocks” popular among “subreddit” user communities like WallStreetBets. Some of the movement’s momentum died in February, but Reddit is back in the news a few months later, as meme trading makes a comeback and Wall Street bets aren’t the only thing driving the market. Here are some of the most popular investment communities on Reddit, including some you may not be familiar with. Heard about.

As Reddit’s largest investment community, WallStreetBets (WSB) has 10.5 million members, with hundreds of thousands of people declaring themselves “false” (the community’s nickname for its members) online at any given time. The forum established the genesis of the meme camp community that dominated news coverage in January 2021.

The main features of VSB culture are vulgarity and memes. Over the years, the community has created a unique term to describe it

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