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Hindustan Times
a day ago
- Business
- Hindustan Times
A fresh retail-trading frenzy is reshaping financial markets
Investors love an acronym. In recent months they have embraced the TACO (Trump Always Chickens Out) trade. They once swooned over the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google). During Europe's sovereign-debt crisis of the 2010s traders fretted over the PIIGS (Portugal, Italy, Ireland, Greece and Spain). A good memory for initials takes a financial historian a long way. The DORK stocks might be less familiar. They include Krispy Kreme (ticker: DNUT), Opendoor, Rocket Companies and Kohl's. The firms—a bakery chain, estate agent, mortgage provider and old-school retailer—have market valuations ranging between $700m and $32bn. One thing that binds them is the lack of love shown by hedge funds, which have been betting aggressively against all of them. Another is the abundance of enthusiasm shown by retail investors, who are snapping up the shares in the hope of squeezing the short-sellers and driving up the price. During July the price of Opendoor alone rose by over 500% before falling back. A new meme-stock frenzy has begun. It mirrors the mania that sent the share prices of GameStop and AMC, a cinema chain, rocketing four years ago. Then, as now, the furious trading had little to do with financial performance. Speculative activity was once blamed on government stimulus cheques and low interest rates. But that story now looks less convincing. Perhaps the exuberance instead reflects changes in the investment technology available to retail investors. Today's mania goes beyond meme stocks. Research by analysts at Goldman Sachs, a bank, suggests that speculative trading (in penny stocks, unprofitable firms and companies with the loftiest valuations) has climbed to levels seen only twice before: during the previous boom that peaked in 2021 and back when the dotcom bubble inflated in the late 1990s. Today's trading remains well below those peaks, but far above what was previously considered normal. Other signs of fervour abound. Transactions in zero-day options, contracts favoured by day-traders that expire the same day, have surged in recent years. According to Cboe Global Markets, an exchange, a record 2.1m changed hands in the second quarter of 2025, up from 1.4m a year earlier. The exchange estimates that retail investors account for at least half of such trading. In 2020 and 2021 the combination of loose monetary and fiscal policy was often credited for the surge in speculation. Covid-era stimulus cheques (or 'stimmies') delivered cash directly to budding retail traders just as everyone was confined to their homes. Robin Greenwood, Toomas Laarits and Jeffrey Wurgler, three academics, tested the theory in 2023. Their study found that the arrival of stimulus cheques in both Hong Kong and America led to an abnormal boost in the price of stocks popular with retail investors. That cannot be the explanation today. The last stimmies landed on American doorsteps four years ago. Monetary policy, meanwhile, has been tightened: the Federal Reserve's balance-sheet has shrunk and ten-year Treasury yields are above 4%. Researchers at the San Francisco Federal Reserve reckon Americans' pandemic-era savings were exhausted more than a year ago. But even without the help of stimulus money, retail investors with a zeal for speculation continue to transform the markets. Such traders now account for about 20% of total American trading volume. That is down from around 24% at the 2021 peak, but well above the 10-16% of the 2010s. The change has been driven not by government handouts, but by technology. App-based platforms have given individuals easy access to leverage, a wide range of securities to choose from and the ability to buy a mere fraction of a share. It is no surprise that the share price of Robinhood, among the largest of the new online brokers, has risen by 172% this year. Investing now appeals to a greater range of Americans. According to JPMorgan Chase, more of the bank's customers are transferring money to an investment account. The share of high-income customers doing so doubled between 2015 and 2023. For low-income customers, the share quadrupled. Beyond a greater volume of speculation, the long-term consequences of a more retail-heavy market are not yet clear. Some investors fear it is already having a negative effect. Cliff Asness, founder of AQR, a quant fund, thinks it is perhaps the biggest contributor to declining market efficiency. 'Technology, gamified 24/7 trading on your phone, and social media in particular are the biggest culprits,' Mr Asness wrote in 2024. The big test will come during the next serious downturn. When the S&P 500 swooned earlier this year, falling by more than 20%, retail traders dashed to buy the dip, and a rapid recovery followed. But the drop was a modest one by historical standards. In a deeper slump, perhaps paired with a recession, would the DORK-buyers and their brethren be so brave? Sooner or later, investors will find out.
Mint
2 days ago
- Business
- Mint
A fresh retail-trading frenzy is reshaping financial markets
Investors love an acronym. In recent months they have embraced the TACO (Trump Always Chickens Out) trade. They once swooned over the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google). During Europe's sovereign-debt crisis of the 2010s traders fretted over the PIIGS (Portugal, Italy, Ireland, Greece and Spain). A good memory for initials takes a financial historian a long way. The DORK stocks might be less familiar. They include Krispy Kreme (ticker: DNUT), Opendoor, Rocket Companies and Kohl's. The firms—a bakery chain, estate agent, mortgage provider and old-school retailer—have market valuations ranging between $700m and $32bn. One thing that binds them is the lack of love shown by hedge funds, which have been betting aggressively against all of them. Another is the abundance of enthusiasm shown by retail investors, who are snapping up the shares in the hope of squeezing the short-sellers and driving up the price. During July the price of Opendoor alone rose by over 500% before falling back. A new meme-stock frenzy has begun. It mirrors the mania that sent the share prices of GameStop and AMC, a cinema chain, rocketing four years ago. Then, as now, the furious trading had little to do with financial performance. Speculative activity was once blamed on government stimulus cheques and low interest rates. But that story now looks less convincing. Perhaps the exuberance instead reflects changes in the investment technology available to retail investors. Today's mania goes beyond meme stocks. Research by analysts at Goldman Sachs, a bank, suggests that speculative trading (in penny stocks, unprofitable firms and companies with the loftiest valuations) has climbed to levels seen only twice before: during the previous boom that peaked in 2021 and back when the dotcom bubble inflated in the late 1990s. Today's trading remains well below those peaks, but far above what was previously considered normal. Other signs of fervour abound. Transactions in zero-day options, contracts favoured by day-traders that expire the same day, have surged in recent years. According to Cboe Global Markets, an exchange, a record 2.1m changed hands in the second quarter of 2025, up from 1.4m a year earlier. The exchange estimates that retail traders account for at least half of such trading. In 2020 and 2021 the combination of loose monetary and fiscal policy was often credited for the surge in speculation. Covid-era stimulus cheques (or 'stimmies") delivered cash directly to budding retail traders just as everyone was confined to their homes. Robin Greenwood, Toomas Laarits and Jeffrey Wurgler, three academics, tested the theory in 2023. Their study found that the arrival of stimulus cheques in both Hong Kong and America led to an abnormal boost in the price of stocks popular with retail investors. That cannot be the explanation today. The last stimmies landed on American doorsteps four years ago. Monetary policy, meanwhile, has been tightened: the Federal Reserve's balance-sheet has shrunk and ten-year Treasury yields are above 4%. Researchers at the San Francisco Federal Reserve reckon Americans' pandemic-era savings were exhausted more than a year ago. But even without the help of stimulus money, retail investors with a zeal for speculation continue to transform the markets. Such traders now account for about 20% of total American trading volume. That is down from around 24% at the 2021 peak, but well above the 10-16% of the 2010s. The change has been driven not by government handouts, but by technology. App-based platforms have given individuals easy access to leverage, a wide range of securities and the fractional trading of stocks. It is no surprise that the share price of Robinhood, among the largest of the new online brokers, has risen by 172% this year. Investing now appeals to a greater range of Americans. According to JPMorgan Chase, more of the bank's customers are transferring money to an investment account. The share of high-income customers doing so doubled between 2015 and 2023. For low-income customers, the share quadrupled. Beyond a greater volume of speculation, the long-term consequences of a more retail-heavy market are not yet clear. Some investors fear it is already having a negative effect. Cliff Asness, founder of AQR, a quant fund, thinks it is perhaps the biggest contributor to declining market efficiency. 'Technology, gamified 24/7 trading on your phone, and social media in particular are the biggest culprits," Mr Asness wrote in 2024. The big test will come during the next serious downturn. When the S&P 500 swooned earlier this year, falling by more than 20%, retail traders dashed to buy the dip, and a rapid recovery followed. But the drop was a modest one by historical standards. In a deeper slump, perhaps paired with a recession, would the DORK-buyers and their brethren be so brave? Sooner or later, investors will find out.
Economist
2 days ago
- Business
- Economist
A fresh retail-trading frenzy is reshaping financial markets
Finance & economics | Meme stocks Photograph: Alamy Jul 29th 2025 | NEW YORK | 4 min read I nvestors love an acronym. In recent months they have embraced the TACO (Trump Always Chickens Out) trade. They once swooned over the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google). During Europe's sovereign-debt crisis of the 2010s traders fretted over the PIIGS (Portugal, Italy, Ireland, Greece and Spain). A good memory for initials takes a financial historian a long way. Stocks Finance & economics A deal with America chooses certain tariffs over risky retaliation Foreign companies are sharing the load. For now Hegemons should care about even puny countries A fierce battle is under way in China The more useful stablecoins and tokens prove to be, the greater the risk There are advantages to the old-fashioned working day
Time of India
2 days ago
- Business
- Time of India
His Rs 2.6 crore salary was once just Rs 500: Self-made techie shares his success roadmap despite limited resources
Early Life and Earning the First Rs 500 Taking Risks to Escape Stagnation The Climb to a Global Career Some success stories don't begin with privilege or perfect opportunities—they begin with grit, sacrifice, and unshakable belief. For one individual, what started as a modest attempt to make ends meet through home tuitions has turned into a remarkable journey leading to a high-paying tech role in the United States. His path serves as a reminder that perseverance and timely support can change the course of a inspiring story, shared by a Reddit user, traces the transformation from earning Rs 500 as a student tutor to making $300,000 (around Rs 2.6 crore) annually as a software engineer at a top FAANG company. It's a reflection of resilience shaped by struggle, family expectations, and the helping hands of friends and relatives along the in a lower-middle-class household, the individual faced financial limitations from the start. Despite doing well academically, the pressure to contribute to the family was always present. During his 12th standard, he began assisting his father in a small local business, delivering goods to shopkeepers while juggling school education was never a guarantee—money was tight, and even entrance exams or coaching fees seemed out of reach. To support himself, he started offering home tuitions during college and earned his first Rs 500. That small income gave him a sense of independence and purpose that would continue to motivate graduation, he took a Rs 3,000-per-month clerical job in another city. But within two months, he chose to return—realizing that settling too early would compromise his long-term goals. Tutoring resumed, and thanks to a supportive uncle who paid Rs 15,000 for a professional course, he secured a government job. While this brought stability, a lingering sense of dissatisfaction pushed him to aim higher.A cousin encouraged him not to waste his academic potential, while his father, though rarely satisfied, instilled the importance of striving for more. With a stipend of Rs 15,000, he enrolled in coaching for competitive exams, balancing his job and tuitions with intense efforts paid off when he cleared multiple prestigious entrance exams and joined IIT. A cousin helped secure a bank loan for the fees, and another gifted him a laptop without hesitation—gestures he described as rare and deeply college came with its own challenges, he pushed through, buoyed by the success of friends who had already secured decent jobs. Hostel mates, coaching classmates, and mentors supported him during difficult times, reinforcing the importance of a strong a job post-IIT wasn't easy due to tough market conditions, but he persevered. After a few job switches and consistent effort, he eventually moved to the United States. Today, he works at a top tech company, drawing a salary of $300,000 per his Reddit post, he expressed gratitude to those who silently supported him—family members, cousins, friends, and mentors. He credits divine blessings, his father's relentless pressure, and encouragement from peers for helping him keep going when giving up felt easier.
India Today
3 days ago
- Business
- India Today
Small-town man shares 27-year journey to high-paying US job in viral Reddit post
A Reddit user has shared a deeply personal account of their 27-year journey from earning Rs 500 through home tuitions to landing a Rs 2.5 crore-per-year role at a top US tech honest, no-frills post - shared on the 'r/India' subreddit - has gone viral for all the right reasons.'I come from a lower-middle-class family where we were plenty, but resources were limited,' the user said. They recalled how they juggled studies and helped with their father's small business during school, later turning to home tuition during college to cover basic 'I still remember the feeling of earning my very first Rs 500 in the year 2000. That small amount gave me a sense of purpose, dignity, and independence I'll never forget,' they wrote.A clerical job came next with a modest salary of Rs 3,000 per month, but it didn't feel right. They returned home, resumed tuitions, and eventually secured a government job thanks to an uncle who paid Rs 15,000 for a professional course. 'It brought some stability, but deep down, I felt something was still missing,' they to push further, the Redditor joined coaching classes on a Rs 15,000 stipend, studied while working, and cracked multiple top institutes, including IIT, on their very first attempt. After graduating, job hunting proved difficult, but persistence paid off. They landed a role and eventually moved to the US.'Currently working as a software engineer in one of the FAANG making \$300K (Rs 2.5 crore approx) a year,' they said, adding, 'Life hasn't been easy, but every challenge, every hardship came with hidden strength and support from above'.The user also acknowledged several people who played key roles along the way—parents, cousins, friends, and even a hostel mate who helped during tough times. 'My father was never happy with what I got—until I got into IIT. That push made me take hard decisions,' they added.'Have faith. Work hard. Trust in God. Respect your elders. And never stop believing in yourself. It's never too late to start,' the user as concluded their a look at the viral Reddit post:The internet, naturally, found the post uplifting. 'Just graduated. Trying to get my first job. This post strikes a chord with me. Thank you, brother,' a user user added, 'I'm not even Indian, and I don't know how I ended up reading this post—but I'm saving it. This is inspiring.''All heroes don't wear capes,' said a user. 'Anyone coming from an unprivileged background who makes it far enough to support their family is a real-life hero,' another user while he's still aiming higher, Reddit felt his story already read like a success.- Ends
