Q: How did you conclude that the WallStreetBets trading style is a form of gambling?
Moradzadeh: In our research, we broke down gambling into three components. The first is placing a wager on an event using money. Second is the intention behind putting down the money. Third is the unpredictability of the outcome. If you look at the r/investing or r/stocks subreddits, you see a very serious and strategically structured way of learning about investing. Posts in WallStreetBets focus on high-risk and aggressive trading, including options trading, where you’re basically betting on whether a stock will go up or down in price. Whenever users place a wager, whenever they put down their money on an options trade, it’s similar to putting a token on either black or white. The whole process resembles gambling. And they specifically use gambling in their terminology.
Q: What does WallStreetBets terminology tell you about the users’ approach to investing?
Kou: Members of WallStreetBets have very specific phrases and terms that can characterize their gambling-like mindset. In our research, we focused on the “YOLO flair,” a digital badge of sorts that users can add to their posts to signal a specific type of content — in this case the flair literally translates to “you only live once.” People use this flair to post high-risk trades. To use the flair, they have to stake more than $10,000 in options or $25,000 in shares, and it has to be really high-risk betting, like an options trade that expires in one day. They also state that they’re gambling or “this is a casino” and use a lot of self-deprecating language, calling themselves degenerates and apes.
Moradzadeh: They say “stonk” instead of stock — a reference to a meme featuring the intentional misspelling — to distinguish their style from other ways of investing and behaving on social media. Looking at the terms they use and how they use them, you get to know them better. You realize that they have created a supportive environment. Whenever they lose money, whenever they are successful in executing a high-risk trade, they use certain language to support each other. For example, they say, “It’s not a problem. I also lost all my savings. It’s not a big deal, we have each other brother.”
When you compare WallStreetBets-style stock trading to more traditional investing literacy, you find that social media investors, especially on WallStreetBets, do not look at their money and savings in the traditional way of understanding what money is. They look at money as a means of play, as tokens similar to what you find in a gambling environment.
