Before he became famous for the big short in the 2000s, Michael Burry discussed stock trades on online message boards. Burry’s posts were thoughtful, well-reasoned and showed deep research.
The sub-Reddit WallStreetBets, with the tagline “Like 4chan found a Bloomberg terminal,” is rarely any of those things.
The forum’s 600,000 members dub satirical options-trade commentary over scenes from TV shows like “It’s Always Sunny in Philadelphia” and rant about a loss that caused a member to get their “face ripped off.” Toss in a smidge of casual racism and a whiff of locker-room misogyny, and WallStreetBets is a window into the back rooms of a seedy stock-market casino with no Burry to be found.
The chat does have Eddie Choi, however. Choi said WallStreetBets taught him how to trade options — contracts that offer the right to buy or sell a security by a specific date. Choi became a rock star on the forum last month after sharing details of his own big short — playing Roku Inc. options.
“I’m naturally a risk-loving person,” Choi said in an interview. “When I see these people making a lot and losing a lot of money, it caught my attention.”
When the stock of Roku, a streaming-service provider whose shares tend to fluctuate, cratered 19% on Sept. 20, Choi’s initial $766 investment in Roku puts — a bet that the stock would decline — ballooned to $50,553 overnight, a 6,500% gain. The profit was so meaty because the puts Choi bought were close to expiration and far out of the money. Bloomberg confirmed Choi’s account via screen shots of his Robinhood Financial trading history.