Don't Blame the Fed for the Robinhood Trading Blitz
The real villains are the discount brokers, who have cut trading commissions to zero.
Robin Hood has his sights set on the markets.
Photographer: Ron Burton/Keystone/Getty Images
Optimism is plentiful in the various online forums such as Reddit’s r/wallstreetbets where the fast-growing number of small investors discuss stocks. There you’ll find little to no discussion of betting against equities — even those of bankrupt companies — following the S&P 500 Index’s remarkable 39% gain from its low this year in late March. The head cheerleader for these legions of day traders is Dave Portnoy, the founder of the website Barstool Sports, who has attracted a wide following by live-streaming his trading exploits.
Why should anyone care about a bunch of market neophytes opening up accounts with the Robinhood investing app to trade stocks? Because the last time we saw such a frenzy of retail participation was during the dot-com mania 20 years ago, which ended in a spectacular bust. I’m happy that people have taken an interest in financial markets, just not to the degree that we have seen lately.