Ten Thousand Day Traders an Hour Are Buying Tesla Shares
Comment of the Day

July 14 2020

Commentary by Eoin Treacy

Ten Thousand Day Traders an Hour Are Buying Tesla Shares

This article from Bloomberg may be of interest to subscribers. Here is a section:

The frenzy in interest means that as of the end of Monday’s trading session, there are now roughly 457,000 users on the Robinhood app that hold shares of the company in some form. That makes it the 10th-most popular stock on the platform, ahead of even Amazon.com Inc., which is held by 358,000 users.

It isn’t at all clear that day traders are the main driver for the nosebleed rally in Tesla shares over the past few weeks. Indeed, there are myriad other possibilities, from the potential reveal of a new battery technology, to short covering, to conjecture over the possibility for the stock’s addition to the S&P 500 Index.

Eoin Treacy's view

The rise of the day trader is another late cycle signal that we are now in the speculative excess phase of the bull market. When regular people make more money from trading than from their regular jobs it is an anomaly that does not last indefinitely.

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