Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at
Speaker 1: Bloomberg and humbled Onna Higher Across Acid reporter with Bloomberg.
Speaker 1: And this week on the show, Well, do you remember
Speaker 1: during the COVID lockdowns, when the meme stocks like game
Speaker 1: Stop and a m C started going crazy and social
Speaker 1: media was filled with posts about amateur tradings who are
Speaker 1: making a killing trading their options. Well, like many things
Speaker 1: on social media, that wasn't exactly the whole story. It
Speaker 1: turns out that collectively, day traders took a massive beating
Speaker 1: on options trades between November two thousand and nineteen and
Speaker 1: June of that's according to some researchers from the London
Speaker 1: Business School who did an in depth study of that
Speaker 1: wild era of trading, and we're lucky enough to have
Speaker 1: them on the show this week to discuss it. But
Speaker 1: what do you tell us about our guests here? Who
Speaker 1: do we have? Yeah, let me introduce them. We have
Speaker 1: so Atlanta, Briska Loova, Anna Pavlova and Ticea Sikorskaya. They're
Speaker 1: all researchers from the London Business School and they're they're
Speaker 1: the authors of the report you mentioned, and I want
Speaker 1: to welcome all of you to the show. Thanks so
Speaker 1: much for joining us, thank you, thank you for having us.
Speaker 1: And I want to start with you. I wanted to
Speaker 1: ask you what you saw happening with retail investor trading,
Speaker 1: what you saw happening in the space, all the mania
Speaker 1: and hype that we had been seeing back in at
Speaker 1: the start of one and what made you guys come
Speaker 1: together and start looking into this topic. We have a
Speaker 1: sample starting from November twenty nineteen going until mid the
Speaker 1: and what we so seeing that sample is a huge
Speaker 1: growth in the trading volume in options. In fact, our
Speaker 1: data is in daily files and you can even measure
Speaker 1: this in megabytes, gigabytes, terabytes. How these files, the size
Speaker 1: of these files grow. Towards the end of the sample,
Speaker 1: we had a huge increase in retail interest during the pandemic.
Speaker 1: Then of course June July twenty we had a major
Speaker 1: peak in our data set, and yeah, it just went
Speaker 1: on from there. It's um, it's growing this volume and
Speaker 1: it's there's no stopping for now. And Sedlanta, can you
Speaker 1: maybe talk about what exactly you guys found, because the
Speaker 1: big takeaway from me. Obviously you looked a lot into wholesalers.
Speaker 1: But the big takeaway and something I ended up writing
Speaker 1: about is the losses accrued by retail investors trading options.
Speaker 1: Can you tell us more about that? Well, we were
Speaker 1: interested in reading, understand and what three investors do in
Speaker 1: the options market, because, to be honest, one of the
Speaker 1: big problems there is that we actually don't really have
Speaker 1: a good measure or good data will allow us to distinguish,
Speaker 1: you know, which of those trade day trades are going
Speaker 1: to be retail and which are going to be coming
Speaker 1: from institutional investors. The only proxy is that people have
Speaker 1: been looking at before were for example, small trades when
Speaker 1: I will receive like somebody buying you know, one lord
Speaker 1: or like five lads, just you know, a little bit
Speaker 1: of the underlying contracts. But we also know that this
Speaker 1: is not a good measure of retail trading because there
Speaker 1: is a lot of institutional investors who actually split the
Speaker 1: big orders in those tiny little bits, and so we
Speaker 1: really wanted to see what the little guils are doing
Speaker 1: because obviously we're concerned about them, and a lot of
Speaker 1: my own students, you know, the trade and financial markets,
Speaker 1: so everyone was watching game stuff and I was teaching
Speaker 1: an asset management class for them, so you know, every
Speaker 1: session we would go back to the news and just
Speaker 1: talk what has been happening in the last three days,
Speaker 1: and every time they would be something new. UM, So
Speaker 1: naturally kind of looking at their strategies, what they do,
Speaker 1: what kind of contracts they like, and if there is
Speaker 1: a better way to identify those trades. Just exactly what
Speaker 1: you know is the core of the paper, and it
Speaker 1: was just a natural thing, you know, following all the
Speaker 1: discussions with the students. But their performance, as you mentioned,
Speaker 1: was exactly what really UM not surprised us. UM. We
Speaker 1: do know that retail investors tend to trade a lot
Speaker 1: more and quite often they as a result, encour much
Speaker 1: larger losses, but we did not expect to see anything
Speaker 1: like this in the options market. So that focus on
Speaker 1: super short term contracts a lot really like pictures of
Speaker 1: all the payoffs and of course those massive aggregate losses
Speaker 1: during such a short period of time. That was mind
Speaker 1: bolting for us. And the lasses are something around one
Speaker 1: billion dollars plus if you account for trading carts, it's
Speaker 1: even higher than that, right, absolutely, absolutely so, not only
Speaker 1: they basically make mistake on you know, which type of contracts,
Speaker 1: which direction you know the price is going to go,
Speaker 1: but they also underestimate clearly is a total cost got
Speaker 1: to pay for making this type of test. Yeah, and
Speaker 1: we asked the question whether their investors perhaps learned from
Speaker 1: their mistakes. So we cut our data month by month
Speaker 1: and looked at their performance each month, and we were
Speaker 1: hoping to see that it was bad in the beginning,
Speaker 1: but it became much better towards the end of the sample. Well,
Speaker 1: we found the reverse. It was actually okay in the
Speaker 1: beginning of the sample, but then it got really bad. Well,
Speaker 1: I see. Can I ask you to come in and
Speaker 1: talk about what actually was happening with the broader market
Speaker 1: at the time, Like how striking was it to come
Speaker 1: to this conclusion considering that we actually had the stock
Speaker 1: market overall, the SMP having a really really great year
Speaker 1: in Yeah. Sure, if you look at the return overall
Speaker 1: of let sels and if a hundred, you do see, uh,
Speaker 1: overall good return for the thousand twenties. But then what
Speaker 1: you should also remember is that there was a huge
Speaker 1: amount of volatility at that time, and this is exactly
Speaker 1: what attracts option traders, you need to have a lot
Speaker 1: of volatility to be able to, you know, hit those
Speaker 1: very rare playoffs that clan I was talking about. And
Speaker 1: so I just wanted to say that probably an options market,
Speaker 1: you don't really need the market to go up to
Speaker 1: have your beds working out. And that's why even now,
Speaker 1: you would not expect people to reduce this bigheraor or
Speaker 1: to stop gambling because the market is going down, because
Speaker 1: you can still trade contracts with the same way of profile.
Speaker 1: And can I also ask you, tay see what sort
Speaker 1: of feedback you guys received after the research paper came out.
Speaker 1: What were people telling you, Well, it's so far in progress,
Speaker 1: we're still presenting it in conferences, but it has definitely
Speaker 1: received a lot of attention. When we are happy that
Speaker 1: we can attract this attention to this topic because it
Speaker 1: seems like it is important, particularly important for this new
Speaker 1: generation of retail traders. And what I find uh sort
Speaker 1: of fascinating about this topic, um is there's been a
Speaker 1: lot of scrutiny in the US towards the wholesalers or
Speaker 1: the internalizers however you want to call him, the the
Speaker 1: market makers who UH engage in payment for order flow.
Speaker 1: I'm wondering if in this research a if if you
Speaker 1: sort of detected anything that would suggest that these players
Speaker 1: did anything that was against the rules. I mean, obviously
Speaker 1: there's a debate about whether this type of practice should
Speaker 1: be allowed or should be reformed to some degree, but
Speaker 1: were they playing within the rules. Well, we haven't found anything,
Speaker 1: I'm afraid to tell you, but they are some facts
Speaker 1: about these wholesalers to be document For example, did you
Speaker 1: know that eighty five of payment for other flow people
Speaker 1: in options comes from just three wholesalers? Sit adele, says Quehanna,
Speaker 1: and we'll we're in. That is amazing. Yeah, And you know,
Speaker 1: there's spent a lot of talk in years past about, um,
Speaker 1: you know, options are incredibly complicated products that perhaps retail
Speaker 1: traders should not be going near there. I remember in
Speaker 1: years past there was talk about, well, in order to
Speaker 1: actually trade options, you should have to undergo some sort
Speaker 1: of education program and pass a test that sort of thing.
Speaker 1: Do you guys think there's some merit to that is?
Speaker 1: Should maybe that be you know, the way the direction
Speaker 1: this should go, that retail traders should perhaps not be
Speaker 1: allowed to engage in this type of really risky trading
Speaker 1: without some sort of education. First, well, during our day job,
Speaker 1: we teach students how to invest their money, and what
Speaker 1: we tell them that even if they make mistakes paying
Speaker 1: too high a fee, they should still invest in the
Speaker 1: stock market because the worst they can do to themselves
Speaker 1: is to not participate in options. There is no such thing.
Speaker 1: There is no such thing as losing on the equity
Speaker 1: premium because there is no such thing as an option premium.
Speaker 1: It's a zero some game. It's a win to some
Speaker 1: one side and the loss to another side. So what
Speaker 1: we tell students is that they should not invest in options.
Speaker 1: Retail investors should not invest in options unless they have
Speaker 1: some risk to hedge. We have looked very carefully in
Speaker 1: our data whether the patterns we find are consistent with hedging,
Speaker 1: and tell you what not at all your speculation as
Speaker 1: far as we can tell. While we talk a lot
Speaker 1: about the recent growth of options popularity inm on retail
Speaker 1: investors and all the technology you know, all these apps
Speaker 1: that go along with it, but it is actually also
Speaker 1: worth remembering that actually people have been trading options for
Speaker 1: not just years, but centuries, and in fact, the first
Speaker 1: ever book that was written about financial markets in six
Speaker 1: in Amsterdam is almost all about options training and it
Speaker 1: talks about exactly the same issues that we see in
Speaker 1: the markets today, herding behavior, over confidence, you know, short
Speaker 1: term mism of the investors, and of course real underestimation
Speaker 1: of the risks of the financial art. I love that
Speaker 1: you have these facts sort of just sitting on the
Speaker 1: top of your head. But Atlanta, I actually have a
Speaker 1: follow up for you, which is when you and I
Speaker 1: spoke a couple of weeks ago, you had told me
Speaker 1: that the type of contracts that retail investors tend to
Speaker 1: favor have sort of lottery features, and I wanted you
Speaker 1: to sort of explain that and what you mean when
Speaker 1: you say lottery like features. Well, what are the usual
Speaker 1: features of the lottery. Um, Usually you pay a small
Speaker 1: fee to participate in this lottery in and raw to
Speaker 1: win something big, but the chances of your winning are
Speaker 1: actually incredibly small, right, So this is the type of
Speaker 1: or bet, but in this case some financial market where
Speaker 1: you pay some fee up front and then there is
Speaker 1: a small probability that you can win, but actually very
Speaker 1: high probabilities that you're not going to get anything. And
Speaker 1: these are exactly the features of the option contracts that
Speaker 1: we find out to be really popular among retail investors.
Speaker 1: So for example, these are the contracts which are very
Speaker 1: short in terms of the maturity, like weekly options that
Speaker 1: are going to expire maybe two or three days from now.
Speaker 1: These are the contracts they like that are going to
Speaker 1: be on the stocks that do not cost a lot
Speaker 1: of money, so the fee of participating is also quite
Speaker 1: not And these are unfortunately also the contracts on securities
Speaker 1: that have been all over the news. So it doesn't
Speaker 1: look like, you know, they're really doing it for you know,
Speaker 1: hedging purpose of doing some sort of deep analysis. It
Speaker 1: seems like they're just following whatever is trendy and try
Speaker 1: to bet on the price going off. An I know
Speaker 1: this is this is gonna be a tough question to answer, um,
Speaker 1: but do you think, what if you have any opinions
Speaker 1: on whether this was sort of a one time phenomenon
Speaker 1: that it was a confluence of you know, people stuck
Speaker 1: at home, too much time on their hands, maybe a
Speaker 1: little too much cash, and sort of a perfect storm
Speaker 1: that created the type of environment for this type of
Speaker 1: as you say, crowd behavior and hurting or you know,
Speaker 1: is there a risk that we could see something like
Speaker 1: this happened again sort of after you know, the traders
Speaker 1: who who lost their shirts in this round of trading, uh,
Speaker 1: you know, get some more money to trade or more
Speaker 1: traders come in. How do you think, you know, how
Speaker 1: do you think of it as as terms of risk
Speaker 1: going forward or was it just sort of one of
Speaker 1: the crazy things that happened during the pandemic And we
Speaker 1: probably won't see something like this again. Haven't we seen
Speaker 1: something like this? Just last week? Bloomberg wrote about Revlon
Speaker 1: that's new game stop true, it's probably speaks more to just, uh,
Speaker 1: you know, that get rich quick mentality that's been been
Speaker 1: with us forever, I guess. And and this is just
Speaker 1: really a drastic example of it, of of it really
Speaker 1: getting out of control, absolutely, and it's gambling and seems
Speaker 1: and hey, it's cheap than Las Vegas. So you mentioned
Speaker 1: that a lot of retail investors tend to favor the
Speaker 1: stocks that they see online or you know, read it
Speaker 1: as often mentioned and Twitter as well, and you had
Speaker 1: found that stacks mentioned on Wall Street, um, those that
Speaker 1: actually didn't totally pay off for retail investors. Right, So
Speaker 1: you have a list of tap losers for retail trades,
Speaker 1: and that includes game Stop and am C in your research.
Speaker 1: But both of those stocks were stuck that were in
Speaker 1: the top five winner's basket for the market as a whole,
Speaker 1: So can you tell us about that? And you're absolutely right,
Speaker 1: you know, the common narrative was that during the time
Speaker 1: of the Game Stop, it was the retail investors that
Speaker 1: finally took control of the markets and managed to get
Speaker 1: a good profit out of those transactions. But that's actually
Speaker 1: not what we see in the data. In fact, game
Speaker 1: Stop and AMC Entertainment, which was another really popular meme
Speaker 1: stop back at the time, they were among the worst
Speaker 1: performing contracts that the retail investors have been dealing with
Speaker 1: during the whole sample that we consider. So not only
Speaker 1: that they definitely so we've lost a lot of money
Speaker 1: on these type of securities. But surprisingly, as they also mentioned,
Speaker 1: it's actually the transactions that were utenated by other market
Speaker 1: participants that is usually petge funds, you know, professional investors
Speaker 1: who managed to win a lot on building on options
Speaker 1: at the same time exactly the same theme stocks Jimmy
Speaker 1: and AMC, and I wonder you know, clearly the narrative
Speaker 1: in the press and the media was that this was
Speaker 1: so driven by Reddit and social media and these influential
Speaker 1: characters on Reddit. Um. I know it's hard to sort
Speaker 1: of suss that out from just crunching through the data
Speaker 1: like you guys did, but I'm curious if if any
Speaker 1: of you have any opinions on if there's something that
Speaker 1: should be done about that phenomenon. Clearly there were some
Speaker 1: dishonest people on social media, I believe, who tried to
Speaker 1: convince amateur new traders that you know, I remember, you know,
Speaker 1: posts about AMC is going to go to a hundred
Speaker 1: thousand dollars of share once the Hedge funds cover, you know,
Speaker 1: some ridiculous sort of notions being thrown around on social
Speaker 1: media that, um, you know, if you're a brand new
Speaker 1: trader and you get sucked into this rabbit hole. Uh,
Speaker 1: it seems like some of them felt worth. I mean,
Speaker 1: you know, we live in a society where freedom of
Speaker 1: speech is highly valued. But is there you know, is
Speaker 1: there something you think that could be done to prevent
Speaker 1: that sort of manipulative behavior that that sort of draws
Speaker 1: people into these losing trades. That's a great question, Mike,
Speaker 1: and to bell STI also really difficult one. Um, defining
Speaker 1: kind of the rules of the freedom of speech is
Speaker 1: incredibly complicated topic, and finance in particular. But one thing
Speaker 1: that I think it's worth always remembering for investors is
Speaker 1: that whatever you do on various forums, that does not
Speaker 1: necessarily mean that this is actually what those people implement
Speaker 1: in real life. So they could be just chip talk
Speaker 1: and a lot of the people would be, you know,
Speaker 1: talking about different strategies or the performance that, but that
Speaker 1: often has nothing to do with reality. Let me give
Speaker 1: you one example. Back at the height of the you know,
Speaker 1: game stop Frenzy um Citadel actually released a report based
Speaker 1: on their transactions of the same retail investors that they
Speaker 1: actually implement, and what they find out is that during
Speaker 1: the week or that incredible increase in the price where
Speaker 1: the Wolstree Bad forum was all about, you know, holding
Speaker 1: too the moon and hoping that the price of Jimmy
Speaker 1: and It's going to reach all the way to one dollars,
Speaker 1: that was the time where the amount of buying investors
Speaker 1: and selling investors was almost exactly identically. So the retail
Speaker 1: or the flow was incredibly balanced, and there was actually
Speaker 1: not much evidence that they were really not holding too
Speaker 1: the moon. So yes, forums are quite trickier, and I
Speaker 1: honestly we don't think that there is any reason to
Speaker 1: believe whatever you read them. After all, these are not
Speaker 1: financial advisors. They're not bound to you by any code
Speaker 1: of ethic. You cannot see, Um, you know a person
Speaker 1: who's been writing, you know, some dishonest information or convincing
Speaker 1: other people to be in a certain way. The best
Speaker 1: thing is just, you know, to remember that you have
Speaker 1: to think very very careful about what to trust in
Speaker 1: terms of the information. I think only read Wildonna's stories
Speaker 1: is what you're saying, right, Definitely, That's not how the
Speaker 1: Twitter responses I get sometimes. But T see, I want
Speaker 1: to bring you in here because a big part of
Speaker 1: what you guys were looking into where the trading costs
Speaker 1: that were associated with retail investors trading these options, and
Speaker 1: so you guys wrote the retail investors might have been
Speaker 1: underestimating the trading costs associated a bit ask spreads were
Speaker 1: super vide for retail versus the overall market. Why is that?
Speaker 1: And can you explain that to us? Yeah? Probably it's
Speaker 1: just for us mentioning that the zero commissioned profit promise
Speaker 1: that typically comes from the broker is only part of
Speaker 1: the cost that you wear when you trade in this market.
Speaker 1: So the price that you will actually pay will not
Speaker 1: be the midpoint, you know, the uh, somewhere in between
Speaker 1: the asking and the big price in the market. UH. So,
Speaker 1: in fact, you will always kind of imagine, if you're
Speaker 1: buying a contract and then you're selling it, you will
Speaker 1: be paying this round trip costs each time. And this
Speaker 1: is what happens in markets with such high ron over
Speaker 1: like options, and that is why investors paidous costs. And
Speaker 1: what we see is also as we mentioned before, this
Speaker 1: investors seemed to prefer really short term contracts. And imagine
Speaker 1: if you were, like, let's say, interested in weeklies on Amazon,
Speaker 1: for example, so you buy it this week and then
Speaker 1: within the wicket will expire. But if you again want
Speaker 1: to gamble, you will buy one more contract and then
Speaker 1: one more one more, so you turn over will be
Speaker 1: pretty high, and each time you will pay around twelve
Speaker 1: percent UH with ask spread. That is what we document
Speaker 1: and the payment sure, zero commission, but twelve percent is
Speaker 1: still a lot. And I'm sure every market maker in
Speaker 1: the world is their eyes pop out their heads when
Speaker 1: they hear the a twelve percent that has spread there's
Speaker 1: a lot of potential than the profit from that. I
Speaker 1: suppose you're absolutely right. And by the way, this spread
Speaker 1: is even higher than what you get for used cars.
Speaker 1: That tells me something about you know, how this market opulates.
Speaker 1: That's great, you can higher than used cars. I like that.
Speaker 1: That might be the craziest thing of the week. So
Speaker 1: when we looked at payment for other flow for the
Speaker 1: very first time, we got data from all retail brokerages
Speaker 1: in the US, and what shocked us is that payment
Speaker 1: for other flow for options is so much higher than
Speaker 1: for stocks. Two thirds of payment for other flow comes
Speaker 1: from options, and you would think only a very small
Speaker 1: fraction of those retails and that there's trade options. That's
Speaker 1: how we started digging, and that's when we discovered that
Speaker 1: twelve percent. That is surely the answer why it is
Speaker 1: so attractive to be a wholesaler in intermediating options transactions
Speaker 1: at Lana. Can I ask you about the new some
Speaker 1: of the headlines that we had seen recently about the
Speaker 1: SEC waying changes to its trading rules. I'm wanting, just
Speaker 1: like from your personal view, what you make of those Well, um,
Speaker 1: to be honest, we still are going to be waiting
Speaker 1: to see kind of the final decision on how those
Speaker 1: changes are going to be implemented in the markets. But
Speaker 1: I think there is definitely a lot of the interest
Speaker 1: in this topic and both equities and options, and that's
Speaker 1: actually one of the reason why we think that looking
Speaker 1: at the options market is becoming more and more important
Speaker 1: because one of the points that the SEC chairman was
Speaker 1: mentioning and there isn't announcement, is that they are thinking
Speaker 1: about potentially adopting some of the elements of this trade,
Speaker 1: how it's organized in the auctions market and then transferred
Speaker 1: into the trading in stocks, in particular the so called
Speaker 1: auctions um during which are the pricing of those contractors
Speaker 1: being determined. So we definitely need to, you know, learn
Speaker 1: more about this market, is how they operate, what's the
Speaker 1: market power of different participants, and how it all fixed together,
Speaker 1: because ultimately we need to design the system that's going
Speaker 1: to benefit retail investors first and foremost. And there are
Speaker 1: lots of questions on which we still don't belt up
Speaker 1: really good data, really good answers. Well, so far, this
Speaker 1: attention of politymaker has been focused primarily on equities. Why equities,
Speaker 1: because these trades and equities retail trades are crossed by
Speaker 1: these wholesalers on their own private platforms. That's what internalization is. Technically,
Speaker 1: options trades cannot be internalized because all options in the
Speaker 1: United States trade on exchanges. But what we've found is
Speaker 1: that some of these orders are effectively internalized, and they
Speaker 1: do it through the so called price improvement auctions. The
Speaker 1: wholesaler engages an affiliated market maker, and the market maker
Speaker 1: brings retail order with its own contra order and pushes
Speaker 1: it through these price improvement auctions. Theoretically, these price improvement auctions,
Speaker 1: they have an exposure period a hundred milliseconds, which is
Speaker 1: a lot in the trading world, and other market makers
Speaker 1: can compete for these orders, but practically the fees to
Speaker 1: break these auctions are quite high, so many orders just
Speaker 1: go through without competition. Therefore, they're effectively internalized. And Garrett
Speaker 1: Gasler mentioned that one of the things they want to
Speaker 1: do is to institute auctions like price improvement auctions we
Speaker 1: have in the options market. This is a little concerning,
Speaker 1: isn't it, because that's exactly how options orders are effectively
Speaker 1: internalized in bright daylight on national exchange. Well, I want
Speaker 1: to actually have a follow up for you on that,
Speaker 1: which is that a lot of the talk about the
Speaker 1: new SEC rules revolved around potentially the zero commissions going
Speaker 1: away should new rules be implemented, And I'm wondering if
Speaker 1: you think that's potentially a possibility if something new does
Speaker 1: come about from the SEC. And by the way, if
Speaker 1: I'm sure listeners can hear a kitty cat yawing in
Speaker 1: the background, she's the six member of our little talk here,
Speaker 1: which I'm I'm all in favor of. Mhm. So well, um,
Speaker 1: there payment for other flow would exist even without the
Speaker 1: actual payment for other flow for brokerages, so exchanges have
Speaker 1: been using a payment for other flow model for a
Speaker 1: long time. There are the maker taker fees, so I
Speaker 1: think effectively this payment for other flow might just move
Speaker 1: to exchanges. So you know, people have to make money anyway.
Speaker 1: They were not going to close all the brokerages, right,
Speaker 1: so it's just they will still be payment for other flow,
Speaker 1: it just will not be all payment for other flow
Speaker 1: and will be in a different form. I think one
Speaker 1: issue that people should always remember is that there is
Speaker 1: no such a thing as free lunch on the market.
Speaker 1: So the fact that there is zero commission that means
Speaker 1: that these fees are just being paid by somebody else.
Speaker 1: So is the question is cool? And ultimately you know
Speaker 1: which pocket is going to be the one where it
Speaker 1: all sort of don't So is it going to be,
Speaker 1: you know, through spreads, is it going to be through commissions,
Speaker 1: is it going to be through other forms of payment?
Speaker 1: And and I just to wrap things up, I want
Speaker 1: to ask you if there's something you're seeing in the
Speaker 1: market or something new that you guys have noticed or
Speaker 1: that has interested you in recent months that you're potentially
Speaker 1: thinking about researching going forward. We see this increase in
Speaker 1: volume across the board in financial markets, not just retail
Speaker 1: trading volume, but some very sophisticated the investors trading volume,
Speaker 1: all sorts of things. So and we are wondering what's
Speaker 1: happening to this ecosystem. It this market is growing and changing.
Speaker 1: It's a big transformational change. And this is what we're
Speaker 1: trying to understand. Who came to that more kit alongside
Speaker 1: retail investors and what the ecosystem is going to look
Speaker 1: like going forward. But first of all, Donna, I have
Speaker 1: to say, you know, this show's tradition is to end
Speaker 1: with the craziest things we've seen in markets this week.
Speaker 1: I don't think I can top something as crazy as
Speaker 1: the options trading in meme stocks. Uh that happened during
Speaker 1: the pandemic. So I'm at a loss for for a
Speaker 1: crazy thing this week. I think the whole show is
Speaker 1: kind of the crazy thing for me. It's fascinating, isn't it.
Speaker 1: It's absolutely fascinating. The first time I'll have to take
Speaker 1: a pass on the crazy thing. That's that's that's very
Speaker 1: rare for you. It is very very rare. As you know,
Speaker 1: I'm an officiate auto of crazy. Are you feeling okay? Yeah,
Speaker 1: I might need to lie down. I might need to
Speaker 1: lie down. As Mike mentioned, all of this has been
Speaker 1: one of the craziest things that we've seen in markets
Speaker 1: in the last year, year and a half, two years.
Speaker 1: But as listeners know, we play the craziest thing we've
Speaker 1: seen at the end of each episode, and since six
Speaker 1: months have passed so far in I know one of
Speaker 1: you has come with the craziest thing that you've collectively
Speaker 1: gathered right about markets or the economy, or something really
Speaker 1: interesting besides obviously what you've been researching that that has
Speaker 1: really uh sort of caught your caught your eyes. So
Speaker 1: c Atlanta, I'll hand it over to you and you
Speaker 1: can sort of present us your craziest thing of of
Speaker 1: two that you've seen so far. Yes, I have one
Speaker 1: good one for you. So apparently many people already know
Speaker 1: about it, but I have literally just found out about
Speaker 1: it a few days ago, that there was a hamster
Speaker 1: called Mr Gox who would choose what type of cryptop
Speaker 1: parnce is to invest in using around in the world.
Speaker 1: And it's really mind blowing. You know, he had live
Speaker 1: streams on Twitch that almost like eighteen thousand followers on Twitter,
Speaker 1: and um he had been performing in exactly the same
Speaker 1: way that he would sort of expect from a random
Speaker 1: hamster choice. So, you know, when the crypto market was starting,
Speaker 1: when everything was going well, or so did his beds.
Speaker 1: And at that time, you know, there are newspapers all
Speaker 1: over the world, you know, Forbes and others are saying,
Speaker 1: you know, this is the hamster that manages to outperform
Speaker 1: more on Buffett in terms of the investors. Yeah, not surprising, right,
Speaker 1: But then obviously when the market decided to go down
Speaker 1: and as we saw those you know, absolutely crushing you
Speaker 1: know movements and the crypto exchanges as and so did
Speaker 1: his portfolio. So ultimately over the last year he lost
Speaker 1: like cent of it starting capital or something like this,
Speaker 1: which I think it's a really good remind us that,
Speaker 1: you know, we all hear the stories about you know,
Speaker 1: there was a stock picking cat back in like two
Speaker 1: thousand fourteen, I think named Orlando. Unfortunately not the one
Speaker 1: that we heard today. Um, maybe next time. The next time.
Speaker 1: That's right, there is a kipto picking hamster. So we
Speaker 1: all hear about the times of their success. But what
Speaker 1: you don't hear is that obviously, you know, one that
Speaker 1: random luck runs out they do of course on the
Speaker 1: perform and a loose a lot of money overall. So
Speaker 1: that's my fun factor for you guys. Yeah, now I
Speaker 1: love it. That's perfect. I actually use the hamster as
Speaker 1: my craziest thing on an episode maybe at the start
Speaker 1: of the year, maybe it was January, I don't remember
Speaker 1: when it was, but I remember seeing an article about
Speaker 1: it and a little hamster wheel and everything, and how
Speaker 1: great the hamster had been doing apparently. And my craziest
Speaker 1: thing also actually is has to do with what's been
Speaker 1: happening in crypto. I've been fascinated by all the implosions
Speaker 1: that have been happening in the crypto space with different
Speaker 1: hedge funds and lenders. But I wanted to point one
Speaker 1: really amazing story out from Bloomberg. Actually it's by our
Speaker 1: colleague Seek Fox, and it's it's about how how how
Speaker 1: to watch the world's biggest bitcoin hack. And it's about
Speaker 1: two I suppose alleged fraudsters who were able to very
Speaker 1: skillfully steal steal something that turned out to be worth
Speaker 1: eight billion dollars worth of bitcoin from bitfit x many
Speaker 1: years ago, and and and they were they were caught. Uh,
Speaker 1: I believe it was a couple of months ago, and
Speaker 1: our colleague Seek just really dives into it and how
Speaker 1: it all happened and how they were able to do it.
Speaker 1: So there's lots of crazy stuff happening in krypto and
Speaker 1: with the hamster with everything, and that really that one also,
Speaker 1: that's sorry, really stuck out to me. But thank you
Speaker 1: guys so much for joining us. I'm so happy you
Speaker 1: were able to come on and talk about everything, and
Speaker 1: hopefully we can have you back on for your next
Speaker 1: big research project. Our pleasure. It was a lot of fun.
Speaker 1: What goes up will be back next week and so
Speaker 1: then you can find us on the Bloomberg Terminal website
Speaker 1: and app, or wherever you get your podcast. We love
Speaker 1: it if you took the time to rate and review
Speaker 1: the show on Apple Podcasts, so more listeners can find us.
Speaker 1: And you can find us on Twitter follow me at Reaganonymous.
Speaker 1: Bildanna Hira is at Coldanna Hira. You can also follow
Speaker 1: Bloomberg Podcasts at podcast What Goes Up is produced by
Speaker 1: Stacy Wan. Thanks for listening, See you next time.