Gamblers Resort to Stock Trading as Means of Filling Empty Void
While almost the entire country went into lockdown mode as the government imposed stay-at-home orders, many Americans soon found themselves stuck indoors, with no relevant stimuli to keep their minds occupied. However, those individuals that entertained their thrill via casino and sports gambling before everything got shut down, have now found themselves a new muse that brings their dopamine back to pre-pandemic levels.
As non-essential businesses such as casinos and pro-sports had to put a pause on their services, many Americans that would otherwise spend their free time betting their income away, have resorted to a new form of gambling: day trading. Online brokers such as TD Ameritrade, Charles Schwab, and Etrade have all seen a significant increase in new accounts, predominantly opened by young investors. According to some analysts, this new trend is largely due to the lack of traditional gambling methods such as sports betting and casino gambling during the pandemic, paired with government stimulus checks, and more time to closely watch markets.
Some of the most popular stocks for these new investors have been those that have a relatively low price, but are also very volatile. According to Robintrack, which keeps tabs on the top-trending stocks on Robinhood, Delta Airlines, Aurora Cannabis, GoPro and Carnival have been the most popular among traders the last several months. DataTreck reports that some of these high risk/high yield stocks have had up to a 120% increase in activity.
However, there tends to be more risk than reward when it comes to day trading. Time and time again, day traders have built up a reputation of losing money – even seasoned investors have difficulty predicting what the stock market is going to do. Some of these amateur investors deemed it a good idea to capitalize on vaccination hopes, but were soon met with failed vaccination results – and ultimately a foregone stimulus check. Nonetheless, this new day-trading trend will most likely dissipate once the economy reopens anyway. Millennials will go back to doing whatever it is that they do, and will no longer have a disposable amount of time to watch the markets.
Information for this briefing was found via CNBC and Robintrack. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
