- Retail investors capitalized on the market comeback, unlike the billionaire hedge fund managers who said stocks would retest their lows.
- Millennial-favored stock trading app Robinhood saw new investors piling into stay-at-home stocks and those most beaten down by the economic shutdown, like airlines, casinos and hotels.
One 26-year-old Robinhood trader made $1,500 in less than 24 hours betting on a beaten-down airline stock, while many so-called experts on Wall Street warned about buying into an overvalued stock market that was bound to tumble again amid the coronavirus pandemic.
Last Thursday, Lequon Godbolt, purchased a call option for American Airlines that made him $200 on the millennial-favored stock trading app.
After seeing reports that the airline was increasing domestic flying for summer travel, Godbolt bought another call option minutes before the close. When the market opened higher last Friday after a surprisingly positive jobs report, Godbolt raked in his profits.
“I just started taking it seriously about two months ago,” Godbolt — a New York resident— told CNBC. “I’ve been watching AAL since the beginning of that time and I felt eventually, once Covid relaxed, markets would move up.”
Godbolt is not alone is his success trading this market. One Chicago-resident flipped his sister’s stimulus check into nearly $10,000.
Robinhood traders lived up to their outlaw name during the coronavirus market downturn. The young investors booked profits — trading stocks with some of the best returns in the past two months — while other Wall Street veterans were left scratching their heads.
“There’s nothing like momentum begetting momentum,” Tim Welsh, founder and CEO of wealth management consulting firm Nexus Strategy, told CNBC. “The aspect of just access is really driving a lot of this and the whole upward tick in the markets, again, just fuels demand.”