Tik-Tok, along with other social media sites including Reddit, Facebook & Instagram, has enabled a new army of day traders that are helping to boost stocks to record hitting levels. Additionally, they’ve helped turn some companies into market sensations, including Tesla and NIO.
The sudden boost in day trading over the past year cannot be solely attributed to the social media sites themselves of course – like everything good and bad that’s happened in 2020, there’s one overriding influence; the coronavirus pandemic. As home trading has boomed as a result of the pandemic, so has the growth of online trading communities – and naturally, they gather on social media platforms.
With day trading now being done by stay-at-home, tech-savvy Gen Z and their Millennial elders, the likes of Tik-Tok, Facebook, Twitter, Reddit & various messaging platforms have become the modern replacement for the Wall Street trading desks. Through various groups, channels and subreddits, day traders are not only gathering to discuss hot stocks and boast of their profits, they’re jumping on the back of each others’ ideas forming the conga lines that pushed some companies towards triple digit gains in 2020.
Online trading discussion between investors isn’t an entirely new phenomenon, far from it in fact. We first saw traders using internet chat rooms back in the 90s, with the stock-dedicated discussions being the main reason the tech-stock bubble was able to sustain. The big difference today, however is how big and widespread social media is – twinned with the access that everyone has to trading platforms and risky instruments, including options.
Not your usual type of trader
The other difference provided by the social media trading craze is the type of people who are trading. The explosion of the online sphere has quite literally opened up most forms of day trading to anyone and everyone – the crypto boom of 2017 was a likely catalyst. Day trading is no longer a medium through which only WASP males with a privileged upbringing and Ivy League education can make a living. In the here and now, anyone from an 18 year old high school dropout to a 30something delivery driver can get in on the action. With the everyman now able to control their own trades directly, it’s fair to say that Jordan Belford would struggle to build an empire on the back of penny stocks in 2021.
#Trading
Day trading discussions moving to social media platforms has led to the introduction of mashup hashtags mixing social media and trading terms. On Tik-Tok, the hashtag Stocktok had been shared over 200 million times by the end of 2020, while the hashtag FinTok had over 80 million shares. Redditors are flocking to the r/Daytrading subreddit. In other news,
PNC Financial Services looking to buy BBVA in the US
has many on their toes.
