IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v46y2022ipas1544612321002890.html
   My bibliography  Save this article

A note on GameStop, short squeezes, and autodidactic herding: An evolution in financial literacy?

Author

Listed:
  • Klein, Tony

Abstract

This note explores a secondary effect of the GameStop short squeeze event and links the exalted focus of retail investors on meme stocks to financial literacy and autodidacticism. From an overview of stylized facts about the short squeeze of GameStop based on high frequency data, short interest, and key figures of related derivatives, it is shown that these financial concepts are reflected in keyword searches across multiple platforms. This self-education with regard to financial terms, keywords, and products and the understanding of basic market speculation mechanisms such as short sales plays a significant role for the influx of retail investors.

Suggested Citation

  • Klein, Tony, 2022. "A note on GameStop, short squeezes, and autodidactic herding: An evolution in financial literacy?," Finance Research Letters, Elsevier, vol. 46(PA).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321002890
    DOI: 10.1016/j.frl.2021.102229
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612321002890
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2021.102229?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. French, Declan & McKillop, Donal, 2016. "Financial literacy and over-indebtedness in low-income households," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 1-11.
    2. Daniel Bradley & Jan Hanousek & Russell Jame & Zicheng Xiao, 2021. "Place your bets? The market consequences of investment advice on Reddit’s Wallstreetbets," MENDELU Working Papers in Business and Economics 2021-76, Mendel University in Brno, Faculty of Business and Economics.
    3. Klein, Tony, 2017. "Dynamic correlation of precious metals and flight-to-quality in developed markets," Finance Research Letters, Elsevier, vol. 23(C), pages 283-290.
    4. Oscar A. Stolper & Andreas Walter, 2017. "Financial literacy, financial advice, and financial behavior," Journal of Business Economics, Springer, vol. 87(5), pages 581-643, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Shi, 2022. "Spillovers between Bitcoin and Meme stocks," Finance Research Letters, Elsevier, vol. 50(C).
    2. Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2023. "What do we know about meme stocks? A bibliometric and systematic review, current streams, developments, and directions for future research," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 589-602.
    3. Weiss-Cohen, Leonardo & Newall, Philip Warren Stirling & Ranyard, Rob & Ayton, Peter & Clacher, Iain, 2023. "Revalidating Fernandes et al.’s 2014 financial literacy scale in response to ongoing legislative and behavioral changes," OSF Preprints 493x7, Center for Open Science.
    4. Yousaf, Imran & Pham, Linh & Goodell, John W., 2023. "The connectedness between meme tokens, meme stocks, and other asset classes: Evidence from a quantile connectedness approach," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrzej Cwynar & Wiktor Cwynar & Mieczysław Kowerski & Kamil Filipek & Przemysław Szuba, 2020. "Debt literacy and debt advice-seeking behaviour among Facebook users: the role of social networks," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 20(1), pages 1-33.
    2. Cesar Leandro, Julio & Botelho, Delane, 2022. "Consumer over-indebtedness: A review and future research agenda," Journal of Business Research, Elsevier, vol. 145(C), pages 535-551.
    3. David Aristei & Manuela Gallo, 2021. "Financial Knowledge, Confidence, and Sustainable Financial Behavior," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    4. Şenol, Doğaç & Onay, Ceylan, 2023. "Impact of gamification on mitigating behavioral biases of investors," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    5. Andrzej Cwynar & Wiktor Cwynar & Monika Baryła-Matejczuk & Moises Betancort, 2019. "Sustainable Debt Behaviour and Well-Being of Young Adults: The Role of Parental Financial Socialisation Process," Sustainability, MDPI, vol. 11(24), pages 1-26, December.
    6. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    7. Noviarini, Jelita & Coleman, Andrew & Roberts, Helen & Whiting, Rosalind H., 2023. "Financial literacy and retirees' resource allocation decisions in New Zealand," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    8. André Betzer & Jan Philipp Harries, 2022. "How online discussion board activity affects stock trading: the case of GameStop," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 36(4), pages 443-472, December.
    9. Abed Rabbani & Wookjae Heo & John E. Grable, 2021. "The role of financial literacy in describing the use of professional financial advisors before and during the COVID-19 pandemic," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 26(4), pages 226-236, December.
    10. Alameer, Zakaria & Elaziz, Mohamed Abd & Ewees, Ahmed A. & Ye, Haiwang & Jianhua, Zhang, 2019. "Forecasting gold price fluctuations using improved multilayer perceptron neural network and whale optimization algorithm," Resources Policy, Elsevier, vol. 61(C), pages 250-260.
    11. Duc Khuong Nguyen & Thomas Walther, 2020. "Modeling and forecasting commodity market volatility with long‐term economic and financial variables," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(2), pages 126-142, March.
    12. Talwar, Manish & Talwar, Shalini & Kaur, Puneet & Tripathy, Naliniprava & Dhir, Amandeep, 2021. "Has financial attitude impacted the trading activity of retail investors during the COVID-19 pandemic?," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    13. Rehman, Mobeen Ur, 2020. "Do bitcoin and precious metals do any good together? An extreme dependence and risk spillover analysis," Resources Policy, Elsevier, vol. 68(C).
    14. Simone Kruse & Thomas Tischer & Timo Wittig, 2017. "A New Empirical Investigation Of The Platinum Spot Returns," Journal of Smart Economic Growth, , vol. 2(2), pages 141-148, September.
    15. Uddin, Md Hamid & Mollah, Sabur & Islam, Nazrul & Ali, Md Hakim, 2023. "Does digital transformation matter for operational risk exposure?," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    16. Felix Reichenbach & Martin Walther, 2023. "Financial recommendations on Reddit, stock returns and cumulative prospect theory," Digital Finance, Springer, vol. 5(2), pages 421-448, June.
    17. Dudda, Tom L. & Klein, Tony & Nguyen, Duc Khuong & Walther, Thomas, 2022. "Common Drivers of Commodity Futures?," QBS Working Paper Series 2022/05, Queen's University Belfast, Queen's Business School.
    18. Talbi, Marwa & de Peretti, Christian & Belkacem, Lotfi, 2020. "Dynamics and causality in distribution between spot and future precious metals: A copula approach," Resources Policy, Elsevier, vol. 66(C).
    19. Elisabeth Sinnewe & Gavin Nicholson, 2023. "Healthy financial habits in young adults: An exploratory study of the relationship between subjective financial literacy, engagement with finances, and financial decision‐making," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 564-592, January.
    20. Reiter-Gavish, Liron & Qadan, Mahmoud & Yagil, Joseph, 2021. "Financial advice: Who Exactly Follows It?," Research in Economics, Elsevier, vol. 75(3), pages 244-258.

    More about this item

    Keywords

    Financial literacy; Short squeeze; GameStop; Reddit; Meme stocks;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321002890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.