Riskier the Better Is Rallying Cry of Day Traders Going Small
- Retail investors are flocking to penny stocks, bullish options
- Bears forced to fold with hedge fund leverage rising to record
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A nondescript week for large-cap indexes belied manic action below the stock market’s surface, where individual investors swarmed to anything with the potential for big returns.
While the biggest benchmarks for U.S. equities fell, smaller and more speculative corners posted solid gains. Fueled by day traders, volume in penny stocks exploded, and bullish options saw the second-busiest day ever. The craze for initial public offerings forged ahead, with newly minted shares from Affirm Holdings Inc. and Poshmark Inc. doubling on their debut.