Boredom Markets Hypothesis – Idle Retail Investor Driving up Stock Price

by reddit_user456

Saw this article from Matt Levine’s newsletter today:

www.bloomberg.com/news/articles/2020-05-22/options-are-now-all-the-rage-for-bored-day-traders-locked-inside?sref=1kJVNqnU

Boredom Markets Hypothesis is this idea that:

people will do more trading (1) if trading is entertaining and (2) if other things are less entertaining

The article above discusses the phenomenon that, because of free time from self-isolation and limited form of alternative entertainment, retail investors have been actively buying stocks instead of selling like they have in the past during market crisis.

READ  Even At The Peak Of The Dotcom Mania Stock Market Sentiment Was Not As Euphoric As It Is Today
READ  2024: Trump already tops Biden 4-1 in betting markets.

The situation is also facilitated by zero trade commission and slicing (brokerages allowing investors buying fractions of shares)