The craziest losses and gains ever on Reddit’s Wall Street Bets
Reddit is all the news can talk about right now. One of its more popular subreddits, r/WallStreetBets, was responsible for getting GameStop’s stock price to reach nearly $470. Members of the subreddit have reported huge gains as many users flocked to the site for free investing advice.
However, as some of the members behind the price hike explained, “half the time people post random s**t.” Which honestly is true. There is even a meme free experience filter. But what happens the other half the time? Between the investing advice and discussion, users are posting about their sweet gains or terrible losses. We dove deep into Wall Street Bets to find the highest highs and the lowest lows.
According to Reddit users tru_anon, they managed to grow their account 10x its worth seemingly overnight. They originally started at $400 and grew to $4000. According to the post on r/WallStreetBets, tru_anon made $1300 on Helios and Matheson Analytics (HMNY). The company should sound familiar to movie fans as it’s the parent company to MoviePass.
MoviePass is dead, and HMNY is trading at $.0016. However, in 2017 at the height of MoviePass’s reign, you could turn a profit if you got in low enough. According to the Wall Street Bets member, he sold them at $30 a share after getting in at $3 a share.
When we did the math, he bought around forty-three shares at the time. He then turned around and put the money into Transenterix at $1.89 a share and made up the rest of the $2,700.
According to one Wall Street Bets user, they turned an $800 put option into a $40,200 profit. The user put a put option on the S&P 500 in March when the coronavirus news was coming out, and the stock market dipped because of all the forced closers. The S&P 500 is a stock market index of the 500 largest traded companies in the U.S.
So you may be wondering how they made their money. Well, a put option is betting on a stock to dip. This is different from short selling, like the hedge fund managers were doing with GameStop. Think of a put option like insurance. The investor and company agree on a strike price, usually the current stock price. The strike price is the price the investor can sell the option.
The investor then pays a premium on the option. If the price falls by the expiration date, they sell the option at the strike price for a profit. However, if the price doesn’t fall below the strike price, the option isn’t exercised. All the investor loses is the premium. With all the companies losing revenue because of the pandemic, the S&P 500’s stock price dropped significantly, losing $1,135 between Feb. 20th and March 23rd.
Nearly $50,000 loss
Before you rush out and start doing put options, it’s super easy to lose all your money. According to another user with put options on the S&P 500, they lost $49,900 on an S&P put option. It was nearly all of their account as it lost 99.8% of its value in one day.
Tesla is insane
One Wall Street Bets member said he made a little over $1 million on Tesla call options. According to the user, he only put $460 into the option calls. Call options are the exact opposite of put options discussed above. They allow the investor to buy shares at the strike price. The point is for the price to go up, so they buy it at the lower price.
Another Wall Street Bets member made over $350,00 in buying and holding Tesla Stock. The user didn’t go into specifics of his position. However, based on the chart they shared, we know it wasn’t a small investment. The account was worth nearly $100,000 before the stock took off. We aren’t sure if their account solely bought Tesla or if the user was more diversified.
The gains from Tesla options are insane. Some members reported gains from Tesla between $2 million to $5 million.
Users also lost on Tesla
This story could be a tale of not betting against Elon Musk and Tesla. However, one user lost his whole portfolio in one year on Tesla put options. According to the Reddit user, he lost a little over $411,000 on the option. They also had a put option on Roku.
Have you started investing after GameStop’s stock price skyrocketed? Do you have your own crazy gain and losses story? Let us know in the comments.