The Irrational Market: Considering the effect of the online community Wall Street Bets on Financial Market Variables

The rise of the Internet, social media and the unfettered access to financial markets has fostered a new era of retail investing. Investing is no longer the activity of the professional, but is available to all, and being exploited to the greatest extent by users of Wall Street Bets. This research considered the implications of retail investors within the Wall Street Bets community on financial markets. Utilising VAR, ARDL and VECM models, we find that Wall Street Bets sentiment provides some incremental investment information, illustrating short-term predictive power over returns of specific assets, and may be beneficial in forecasting short-term volatility and trading volume.