Date: Aug. 15, 2022
Put on your diamond hand hat and buckle up, this real life is stranger than fiction blurb is going to be a wild ride. The year of 2021 resulted in a short squeeze that skyrocketed GameStop’s price share over 1500%. The well known company sells: cool hats, plush animals, figurines, and of course new and used video games. This massive increase occurred over just two short weeks. This anomaly was mainly a result of the Reddit community. Specifically, subreddits or community forums dedicated to niche financial topics.
The investment forum r/wallstreetbets, which focuses on stocks had a considerable impact on the stock market. The subreddit and its followers are known for aggressive trading strategies. They revolve around leveraged options trading tactics. The members of r/wallstreetbets do not practice fundamental investment steps. Their techniques are a nontraditional approach to investing. This can be a high risk but high reward lifestyle. You can quickly improve your financial situation and gain fast income. Again, the risk can be high. It is not uncommon for members of this following to use borrowed capital such as student loans to invest. Individuals within the community refer to themselves as “autists”, “retards”, “degenerates”, or “Apes”. They use slang for stocks, commonly calling them “stonks”. Perhaps the most well known terminology is the phrase “diamond hands” and “paper hands”. Diamond hands a compliment for holding stocks and staying strong. While paper hand, an insult, suggest that you are week and sell stocks at the first sign of a loss on your investment. Good thing we put on our diamond hands hat, before we left the station.
The movement has been so influential that merchandise and gear can even be seen in our day to day lives. Garments such as this diamonds hands hat, that was sold by 3000 hat company.
People that wear these items are clearly demonstrating a sign of their involvement and support for a change within the investment community. I think we can all agree 3000 Hat company designs cool hats, but whether this movement will last, is still to be seen. The participants of r/wallstreet bets do not shy from new age sarcastic jargon, highly aggressive trading options, or the occasional joke that would make some stand up comedians blush. Don’t expect an apology. They are highly motivated, full of steam, and living fast. Whether their strategies have merit, time will surly tell. One thing that’s certain their actions caused losses for some large US firms. The uproar also made a huge impact on retail brokers, most notably Robinhood. During the peak of the GameStop stock madness, the platform restricted the trading of certain stocks in an effort to not allow the price to be driven up. These actions attracted a sizable amount of negative attention from both internet users and politicians. It’s unlikely you’ll see 3000 Hat company designing a Robinhood hat anytime soon. Like all clothing companies, their goal is to make cool hats, not 1.1 Google star rated hat. The community has existed since as early as 2012, but has only recently gained such a mass of followers. What these diamond hat wearing, short squeezing apes, will do next is a mystery, but you can be sure it capture and audience.