Wall Street Casino Is Open for Business as Meme Stocks Take Over

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(Bloomberg) -- The stock market is having a sleepy trading session Tuesday ahead of Wednesday’s critical inflation data. But in the more obscure, speculative...

-- The stock market is having a sleepy trading session Tuesday ahead of Wednesday’s critical inflation data. But in the more obscure, speculative corners of the investing world the casino is rocking.Five Under-the-Radar Billionaires Making Vast Fortunes in Modi's India

Strategies that use algorithms to capture price momentum are now better positioned to jump on these rallies before they go mainstream. They can even add a little juice to the surges. “There’s a very different, latent set of retail traders waiting to see certain price points just to sell out which we didn’t have last time,” said Dan Egan, vice president of behavioral finance and investing at robo-adviser Betterment. They dynamic could drive the cycle of the trade, he added.

Then, there are the trading platforms such as Robinhood Markets Inc. and market-making firms like Citadel Securities that will profit either way. Robinhood’s commission-free trading is partly driven by its ability to make money through transactions in what’s called payment for order flow. The money maker is controversial because brokerages get paid by market makers to route orders through them, rather than directly to stock exchanges.

“A big change since last time is that a number of managers have changed their risk controls on the short side so they won’t get burned as bad,” Agecroft’s Steinbrugge said.Cheap Prison Labor Is Keeping People Locked Up Longer, Suit AllegesThis dividend stock is still down by 36% in the last year but offers even more growth after taking a year to balance the books. The post Should You Buy This 7% Dividend Stock While it’s Below $6? appeared first on The Motley Fool Canada.

 

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