If He's Still in, I'm Still in! How Reddit Posts Affect Gamestop Retail Trading

31 Pages Posted: 13 May 2021

See all articles by André Betzer

André Betzer

University of Wuppertal - Schumpeter School of Business and Economics

Jan Philipp Harries

University of Wuppertal - Schumpeter School of Business and Economics

Date Written: May 10, 2021

Abstract

In January 2021, the stock price of NASDAQ-listed GameStop Corporation surged more than thirty-fold following frenzied discussions on a Reddit forum. While Social Media-organized retail trading is not a new phenomenon, the magnitude of the resulting swings in GameStop's share price in combination with a short- and/or gamma squeeze scenario is unprecedented. Using financial data as well as an extensive dataset of Reddit posts, we show that Reddit posts lead to increased retail trading activity in GameStop shares and introduce a new option-based measure for retail trading proportion which could help academics, regulators and investors to track and analyze similar developments in the future.

Keywords: GameStop, Retail Trading, Sentiment Trading, Market Structure

JEL Classification: D91, G14, G41

Suggested Citation

Betzer, André and Harries, Jan Philipp, If He's Still in, I'm Still in! How Reddit Posts Affect Gamestop Retail Trading (May 10, 2021). Available at SSRN: https://ssrn.com/abstract=3844378 or http://dx.doi.org/10.2139/ssrn.3844378

André Betzer

University of Wuppertal - Schumpeter School of Business and Economics ( email )

Gaußstraße 20
Wuppertal
Germany

HOME PAGE: http://finance.uni-wuppertal.de/index.php?id=1153

Jan Philipp Harries (Contact Author)

University of Wuppertal - Schumpeter School of Business and Economics ( email )

Rainer-Gruenter-Str. 21
Wuppertal, 42119
Germany
3179 (Phone)

HOME PAGE: http://https://controlling.uni-wuppertal.de/de/team/jan-philipp-harries-dipl-betriebsw-dh.html

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