The Robinhood Takeover?

Over the last few months data has shown that there has been a huge pop in the amount of traders in the market. A lot of people seemed to have caught on about the potential gains stocks and options could bring. Most users are using Robinhood to make option trades about hyped up stocks, and Wall Street may be taking advantage of this. Wall Street traders know how antsy and fearful newcomers are of losing money, causing buyers to sell back their options sooner to try and “cut losses.” Remember for every option you buy there is a seller on the other end thinking the stock will move opposite the way you think, looking to take your money. It’s not proven but it makes sense for high leveled traders to sell expensive premium on stocks that were just hyped up on Tik-Tok. As crazy as it may seem, Wall Street sees the hype and may pump or dump a stock to take advantage. Bottom line is, be careful with the stocks you trade. Educate yourself on the stock, don’t just use technical analysis, and most importantly answer the question, “Why would this stock move in this direction?” Or change your strategy. One I personally began using is put X amount of money into a stock where you are comfortable with losing all of it, if things were to hit the fan. Most of the time your options aren’t profitable within the first day you buy them anyway. So, why cut loses early when there is still time? Plus, this strategy causes you to be less fearful and smarter with your money.

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