Feb 1, 2021

Coye Cheshire on How the Gamification of the Stock Market Can Hurt Inexperienced Traders

From CNET

Even before GameStop stock frenzy, Robinhood raised a lot of red flags

By Richard Nieva 

Robinhood, the stock trading app at the center of the bizarre GameStop saga, has long been controversial. Even before the run-up of GameStop and other stocks like AMC and BlackBerry elevated the fee-free service to a household name, Robinhood had been accused of downplaying the risks of stock trading, essentially presenting complex financial instruments like a game in its effort to draw in young people and new investors...

Coye Cheshire, a professor at the UC Berkeley School of Information, says no one knows how the situation on the stock market -- which has now swept up shares of AMC, Koss and others -- will play out. But if major hedge funds, which were the target of the r/WallStreetBets mob, can get wiped out, so can a lot of regular people.

"The app makes [trading] seem fun and easy, but the market is really complicated," Cheshire said. "That can be dangerous."

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Last updated: February 2, 2021