Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit (2024)

Abstract

Financial trading has become commonplace, involving the purchase and sale of securities such as stocks and bonds. While HCI research has investigated people's financial literacy and decision-making and how to design for it, little is known as to how people form financial conversations on social media. To answer this question, we used a grounded theory approach to analyzing financial conversations in the YOLO ('you only live once') posts on the r/WallStreetBets subreddit (WSB), one of today's largest financial online communities. We describe how WSB's discursive culture portrays its gambling-like, high-risk trading by likening trading to gambling, celebrating it, and normalizing financial risk-taking. We discuss the rise of social investing, including how individual investors' affective relationships encourage their outsized risk-taking, as well as reflect on its looming financial risks, especially to already marginalized groups. Lastly, we propose implications for design and policymaking.

Original language	English (US)
Title of host publication	CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems
Publisher	Association for Computing Machinery
ISBN (Electronic)	9798400703300
DOIs	https://doi.org/10.1145/3613904.3642768
State	Published - May 11 2024
Event	2024 CHI Conference on Human Factors in Computing Sytems, CHI 2024 - Hybrid, Honolulu, United States Duration: May 11 2024 → May 16 2024

Publication series

Name	Conference on Human Factors in Computing Systems - Proceedings

Conference

Conference	2024 CHI Conference on Human Factors in Computing Sytems, CHI 2024
Country/Territory	United States
City	Hybrid, Honolulu
Period	5/11/24 → 5/16/24

All Science Journal Classification (ASJC) codes

Human-Computer Interaction
Computer Graphics and Computer-Aided Design
Software

Access to Document

10.1145/3613904.3642768

Cite this

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Vancouver

Kou, Y., Moradzadeh, S. (2024). Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit. In CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems Article 357 (Conference on Human Factors in Computing Systems - Proceedings). Association for Computing Machinery. https://doi.org/10.1145/3613904.3642768

Kou, Yubo ; Moradzadeh, Sam ; Gui, Xinning. / Trading as Gambling : Social Investing and Financial Risks on the r/WallStreetBets subreddit. CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems. Association for Computing Machinery, 2024. (Conference on Human Factors in Computing Systems - Proceedings).

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abstract = "Financial trading has become commonplace, involving the purchase and sale of securities such as stocks and bonds. While HCI research has investigated people's financial literacy and decision-making and how to design for it, little is known as to how people form financial conversations on social media. To answer this question, we used a grounded theory approach to analyzing financial conversations in the YOLO ('you only live once') posts on the r/WallStreetBets subreddit (WSB), one of today's largest financial online communities. We describe how WSB's discursive culture portrays its gambling-like, high-risk trading by likening trading to gambling, celebrating it, and normalizing financial risk-taking. We discuss the rise of social investing, including how individual investors' affective relationships encourage their outsized risk-taking, as well as reflect on its looming financial risks, especially to already marginalized groups. Lastly, we propose implications for design and policymaking.",

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Kou, Y, Moradzadeh, S 2024, Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit. in CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems., 357, Conference on Human Factors in Computing Systems - Proceedings, Association for Computing Machinery, 2024 CHI Conference on Human Factors in Computing Sytems, CHI 2024, Hybrid, Honolulu, United States, 5/11/24. https://doi.org/10.1145/3613904.3642768

Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit. / Kou, Yubo; Moradzadeh, Sam; Gui, Xinning.
CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems. Association for Computing Machinery, 2024. 357 (Conference on Human Factors in Computing Systems - Proceedings).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

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N2 - Financial trading has become commonplace, involving the purchase and sale of securities such as stocks and bonds. While HCI research has investigated people's financial literacy and decision-making and how to design for it, little is known as to how people form financial conversations on social media. To answer this question, we used a grounded theory approach to analyzing financial conversations in the YOLO ('you only live once') posts on the r/WallStreetBets subreddit (WSB), one of today's largest financial online communities. We describe how WSB's discursive culture portrays its gambling-like, high-risk trading by likening trading to gambling, celebrating it, and normalizing financial risk-taking. We discuss the rise of social investing, including how individual investors' affective relationships encourage their outsized risk-taking, as well as reflect on its looming financial risks, especially to already marginalized groups. Lastly, we propose implications for design and policymaking.

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Kou Y, Moradzadeh S, Gui X. Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit. In CHI 2024 - Proceedings of the 2024 CHI Conference on Human Factors in Computing Sytems. Association for Computing Machinery. 2024. 357. (Conference on Human Factors in Computing Systems - Proceedings). doi: 10.1145/3613904.3642768

Trading as Gambling: Social Investing and Financial Risks on the r/WallStreetBets subreddit (2024)

FAQs

Is WallStreetBets still a thing? ›

In this context, it is perhaps no surprise that interest in WallStreetBets has waned. However, this community-focused approach to investing doesn't seem to have faded.

Show Me More ›

Who is WallStreetBets? ›

WallStreetBets was founded in 2012 by Jaime Rogozinski, a then-30-31-year-old American citizen. "When I created the sub, I was looking for a community, a place for people to talk about high-risk trades in an unapologetic way for people to make some short term money with disposable income," Rogozinski told TMZ Live.

Read On ›

What is WSB Reddit? ›

r/wallstreetbets is a subreddit community on Reddit that was created in 2012 by Jaime Rogozinski 12. It is a platform for people to discuss high-risk trades and make short-term money with disposable income 1. The community has grown significantly in popularity since 2020, with the rise of stock trading apps 1.

Tell Me More ›

What is the difference between gambling and stocks? ›

Investing is the act of committing capital to an asset like a stock, with the expectation of generating income or profit. Gambling, on the other hand, is wagering money on an uncertain outcome, that statistically is likely to be negative. A gambler owns nothing, while an investor owns a share of the underlying company.

Explore More ›

Why did Reddit shut down WallStreetBets? ›

Reddit informed Rogozinski that his account was suspended for violating company policy by "attempting to monetize a community," the lawsuit noted. The lawsuit alleges that "people use Reddit to market and sell everything from investment advice to bodily fluids."

Show Me More ›

Is short squeeze illegal? ›

Although short squeezes may occur naturally in the stock market the U.S. Securities and Exchange Commission (SEC) states that abusing short sale practices is illegal. In addition, short sales used to manipulate the price of a stock are prohibited.

Company	Mentions	AI Score
Amazon AMZN	114 28.1%	Sign up
Microsoft MSFT	106 12.8%	Sign up
Invesco QQQ QQQ	99 421.1%	Sign up
Google GOOGL	94 8%	Sign up

What does Yolo mean in WSB? ›

YOLO. Rick Neves/Shutterstock. YOLO, the acronym for "you only live once," was popularized a decade ago by rapper Drake. Now, on Wall Street Bets, the term is used for a trader who goes all in on a stock.

Keep Reading ›

Why is GME rising? ›

The rise in GME is driven by a broader rally seen in “meme” stocks (refers to the stocks that see growth primarily fueled by social media attention).

Tell Me More ›

Is investing in stocks against the Bible? ›

The Bible doesn't specifically state that we should invest, but also does not forbid it. Investing is mentioned in Proverbs 31:16 and used in Jesus's parables (ex. Parable of the Ten Minas found in Luke 19:11-27), implying that it is expected and normal.

Learn More Now ›

Why is trading not gambling? ›

There is no house advantage in trading, unlike gambling

When you are gambling at a casino, it is the casino that is the counter party. Therefore the casino is an interested party as they need to ensure that you do not make so much money that you bring the house down.

Get More Info Here ›

Is gambling a smart investment? ›

But gambling is typically a short-lived activity, while equities investing can last a lifetime. Investing in the stock market typically carries with it a positive expected return on average over the long run. On the other hand, there is a negative expected return to gamblers on average and over the long run.

Discover More ›

Can WallStreetBets happen again? ›

Despite the risks, Jones believes that a repeat of the market movements of January 2021 could happen. “The phenomenon of people getting really excited about stocks and talking about them on social platforms is not going to change,” he says.

See Details ›

How much did Keith Gill make from GameStop? ›

The profit on Keith Gill's GameStop trades

It consisted of two parts: 5 million shares of GameStop stock purchased for $21.27, worth approximately $116 million at the time of the post. 120,000 June 2024 $20 call options purchased for about $5.68, worth nearly $66 million at the time of the post.