Omar couldn't believe what was happening.

He should have been concentrating on the student he was tutoring in physics — a job he did during his free time while enrolled in a post-baccalaureate pre-med program — but Omar's eyes kept darting back to the Robinhood app open on his phone.

Omar had invested $6,000 in Beyond Meat options; in the days before that tutoring session he'd seen the value of that investment rocket up to almost $15,000. What he was witnessing now, though, felt like torture.
 
Down $2,000.
 
Down $3,000.

 By lunchtime, the stock options Omar had bought were down around $7,000 from their peak.

 Omar knew he should probably sell the options before they became worthless. But he followed the mantra of the place where he'd first learned about options trading, the subreddit r/wallstreetbets, and held on.

"It was diamond hands," said Omar, using the site's term for holding an option even after incurring extreme losses or gains. "It was like, all or nothing."
 Within two days Omar had lost not only his gains but his entire initial investment. 

 Desperate to earn it back, Omar, 23 years old and the child of working-class immigrant parents, took the rest of the money he could scrounge up — cash from his tutoring gig, his stimulus check, a chunk of his freshly-deposited student loans that was supposed to pay for his living expenses (which were basically non-existent after he had moved home during the Covid-19 outbreak) — and poured all of it, $22,000, into his Robinhood account. Then he opened up WallStreetBets.

 "I was really scared," Omar told CNN Business in an interview in August. "All I wanted to do was just make my initial money back and pay it off."

 By the end of the week, he had lost it all again.

 Omar, who spoke on the condition that he be referred to using a pseudonym out of concern over the legality of trading with money from his student loans, said that he blames himself for his losses but regrets ever stumbling upon one of Reddit's most active communities.

 "I would not have traded options," Omar admitted, "if I had not found WallStreetBets."

This January, with WallStreetBets now an inescapable presence, Omar was back on the board. Back to trading.

Stock market meets internet fringe culture

This past week has been a banner one for Reddit's island of misfit investors.

WallStreetBets exploded into the mainstream, moving from the front page of Reddit to the front page of the New York Times and nearly every other major news site. The subreddit's short-squeeze of GameStop helped shoot up the price of the video game retailer's stock a mind-boggling 1,700% from the beginning of January to Wednesday (before it fell again Thursday), captivating the minds and wallets of investors — both casual and institutional — and financial regulators.

But while millions are now discovering WallStreetBets for the first time, it has been building momentum throughout the pandemic. One can trace its epic rise to a perfect storm of favorable conditions: the exponential growth of the app Robinhood and its no-fee options trading, the extreme volatility Covid-19 brought to the markets, the stimulus checks mailed to millions of Americans, the lack of televised sports for much of the year, and the unwanted free time stuck at home the pandemic has forced on many people.

Describing itself as if "4chan found a Bloomberg terminal," the forum's giddy nihilism, inscrutable language and memes fueled a war on a perceived corrupted mainstream.

And it's led WallStreetBets' evolution into an unprecedented force of retail-investing financial radicalism, offering the allure of get-rich-quick gains to a rapidly expanding audience of millions. (5, at last count).

Many celebrated WallStreetBets' war on GameStop short-sellers as a populist campaign against hedge-fund raiders looking to profit off the destruction of a well-known retail brand like GameStop. But unlike many other similar online communities, there is also a clear financial goal for the people in it.

"It's a means to an end," explained one of them, AJ Vanover.

At his retail job in a battery store in Missouri, Vanover makes around $35,000 a year. But on Wednesday, he found himself a paper millionaire. (His Robinhood account exceeded $1 million, according to screenshots he provided, but he hadn't cashed out yet). For months, Vanover had been following GameStop as a "value play," posting his thoughts on WallStreetBets along the way.

This week, Vanover was off from work, quarantining after a coworker contracted Covid-19, but now thinks he won't return to his old job. "I know I'm going to do two-weeks' notice," he said with a nervous laugh. "So, I'll be nice about it.' Vanover said he plans help his parents with their mortgage, and he intends to keep investing in options.

 'These guys can move markets'

Enter WallStreetBets for the first time and you'll almost certainly be a bit lost.

The forum's language can be difficult to understand, even for someone who knows typical Wall Street jargon. The vocabulary specific to the subreddit is extensive, and it will almost never be explained to a newbie earnestly asking for a term's definition. Posters revel in their crudeness; homophobic epithets are tossed around as terms of affection.

The site is a chaotic mix of memes, screengrabs of wild losses and gains, the occasional "deep dive" into a stock, all unified under the guiding principle of betting as much money as you possibly can on the highest possible risks, generally short-term options trading. Trading individual stocks, as opposed to options, is generally taboo. There's r/investing for you right down the corner, thank you very much.

But fringe online movements have shown that internet culture can lead to extreme behaviors, making radical ideas palatable for people raised on memes and 4chan in a way that they likely wouldn't be, at least at first, if presented in a straightforward manner. In the case of WallStreetBets that extremism has a real financial impact.

"These guys can move markets," said Jeremy Blackburn, an assistant professor of computer science at Binghamton University who studies extremist communities on the web.

"That's a huge deal."

Lana Swartz, assistant professor of media studies at the University of Virginia, describes the subreddit's financial spin on the kind of nihilism seen on 4chan as the idea that its users should have a "relaxed" relationship with their money. She characterized the spirit this way: "Let it come. Let it go. Because the kind of secret that the elites know is that money is. B.S., and only by knowing that money is B.S. can you accumulate a lot of it, which should be your goal."

That ethos on WallStreetBets not only encourages risky trades, but also trading the entirety of your net worth or portfolio in a single risky trade — a financial move that would be sure to make any certified financial advisor bleed from their ears.  

"It's not even the ends that matter. It's the means. It's the fact that you're placing this bet, that's where the value in all this is. Sure, you may get money, or you may end up broke, but you played the game, and you did it in some crazy way," Blackburn said.

"It is a little bit scary, though, right? Because this is real money. And any time you are more interested in the game than the outcome, that can be incredibly dangerous."

4Chan meets a Bloomberg terminal

WallStreetBets has long described itself as "4chan with a Bloomberg terminal."

Look closer at communities like 4chan or 8kun, and WallStreetBets, and it's not just a shared use of memes that link them.

One key element to 4chan is its opposition to mainstream "normie" culture, an idea that has broad applicability. For many on 4chan, normie culture is the popular kids in your high school. For WallStreetBets, the normie culture it stands in opposition to is one of "safe" mainstream investing: focusing on long-term gains, maxing out your 401(k)s, buying index funds; Suze Orman 101. "Boomer" advice, as users say.

On WallStreetBets, that's all depicted as a sucker's game.

"They don't want to wait 20 years for their bets to pay off," Blackburn said.

Swartz sees the cynicism surrounding long-term investment advice on WallStreetBets as an understandable reaction for a young generation that has witnessed two economic crises, the chaos of the Trump years, ever-growing inequality and the looming threat of catastrophic climate change.

"We're living in a time of absolutely unprecedented uncertainty," she said. "There really is no reason for anyone in their twenties to imagine that their 401(k) is going to pay off in 50, 60 years the way it did for their parents. And I'm not saying they shouldn't believe it. I'm just saying they have good reason not to."

The specter of the 2008 financial crisis, in particular, looms large over the community.

"I was in my early teens during the '08 crisis," wrote one user going by the handle ssauronn in a recent post celebrating the site's apparent (albeit potentially fleeting) victory over hedge fund Melvin Capital, which, according to CNBC, closed out its position in GameStop this week after taking a huge loss. "When that crisis hit our family, we were able to keep our little house, but we lived off of pancake mix, and powdered milk, and beans and rice for a year."

"Stop listening to the media that's making us out to be market destroyers, and start rooting for us, because we have a once in a lifetime opportunity to punish the sort of people who caused so much pain and stress a decade ago, and we're taking that opportunity."

You can also spot a shared nihilism between 4chan and WallStreetBets in their casual and ironic references to suicide. On WallStreetBets, longing "$ROPE" is an inside joke for suicide, one that is almost always posted under a disastrous loss.

4chan, 8kun and WallStreetBets exalt a cartoonish version of autism both ironically and sincerely — "autists" is a term of pride on both sites — as a superpower of persistence that allows one to fully commit to a worldview leagues apart from the stifling conventional wisdom of the mainstream.

For political extremists a so-called "autist's" powers can be a weapon to be deployed against enemies in destructive doxxing and harassment campaigns. At WallStreetBets, an "autist's" power is displayed by committing to a trade with "diamond hands," holding on and refusing to sell even after incurring extreme losses or gains with the goal of attaining ultimate profit.

However, there are key differences between WallStreetBets and sites like 4chan.

Unlike other fringe groups, WallStreetBets generally hasn't doxxed its enemies, or brigaded others (when one subreddit aggressively posts on a rival subreddit), and while it has a long-standing rivalry with the staid r/investing — a subreddit so committed to its ideals of modesty and risk avoidance that it shuns individual stock picks — StockJock-e, a moderator for r/investing, politely downplayed the beef, calling it "facetious and exaggerated" in a message to CNN Business.

To Blackburn, who has focused his studies on toxic internet behaviors ("a**holes are my expertise," he said), WallStreetBets is — by the low standards set by others — a relatively well-behaved online community. "It's kind of not a bad behaving sub," said Blackburn.

"Minus the fact that people are getting wrecked money-wise." 

Making the big kill

To understand how risky the trading strategies employed on WallStreetBets are, it's key to understand just how options trading works.

Instead of buying a stock, an options contract allows an investor to purchase the option of buying 100 shares of a stock at a set price in the future. As the expiration date of the contact draws closer, the valuation of the contract can swing rapidly, as it will become worthless to the buyer if it doesn't hit its target price.

While options trading is risky — if you bet wrong you can be stuck with a literally worthless asset — it also allows for leveraged bets. The shorter the expiration date of an options contact, the riskier and more volatile it becomes.

"The nature of stock options convinces people to take a thousand dollars and turn it into a hundred thousand or in some cases, one million dollars," said Jaime Rogozinski, who founded WallStreetBets in 2012 but was removed from the site by Reddit in April 2020. (Reddit says he was removed for profiting off the WallStreetBets brand, a claim he denies.) "You don't feel bad for the person when they lose the thousand dollars."

WallStreetBets rise hasn't happened in a vacuum; it coincides with a broader boom in retail options trading.

"Retail option volumes are completely off the charts," said hedge funder Benn Eifert of QVR Advisors, who described the volume as being "multiples of any prior record that we've ever seen."

Aided by Robinhood, which revolutionized the ease and cost of trading options — and which reportedly profits more from them than regular stock trades — retail investors only have to answer a few short questions to gain access to a volatile world. (Although Robinhood makes this process easy, it cautions that options trading "entails significant risk and is not appropriate for all investors.")

But if options trading is risky, and short-term options ("F.D's," short for "F****ts Delight" in WallStreetBets' casually-flung homophobic lingo) are the single riskiest type of options, putting your entire life savings ("YOLOing") into a short-term option is, from any "rational" financial perspective, complete madness.

It's also so common on WallStreetBets that YOLOing has its own flair or tag, allowing you to search through the many, many people posting their life-savings-and-all trades.

"Generally, this kind of behavior tends to result in a loss of most or all of the money of the people involved," said Eifert.

But of course, high-risk trades come with the tantalizing possibility of high rewards — rewards that inevitably find themselves on the front page of WallStreetBets.

Minhajul, 22, is a college student and part-time pharmacist, born in Bangladesh and raised in Queens, New York, who decided to put his stimulus check into Robinhood after seeing what he described as "insane" and "crazy" gains posted on WallStreetBets. Buying weekly options trades and reinvesting the entirety of his gains with each successful trade, Minhajul managed to spin his initial $1,200 investment into $280,000 in a delirious two-week period towards the end of July.

"I'm like, 'Holy sh**... I'm rich,'" Minhajul, who did not want his full name printed, recalled in an interview.

On the night of July 30th, Minhajul couldn't sleep — the possibilities now afforded to him by his newfound riches kept swimming his head: a new car, even a new house. But the next morning Minhajul found himself exhausted and passed out for a mid-morning nap. When he woke up, his portfolio had bled $220,000. By the end of the week, he was down to $8,000.

Minhajul said he was unfazed by the loss of his unrealized potential gains — to him he was playing with house money anyway — but others aren't so lucky.

Loss porn and other rituals

Click on WallStreetBets' extensive (and always expanding) "loss" section, and you'll witness each of the five stages of grief warped through a funhouse mirror of online ironic detachment.

"Loss porn" is a staple on the site, one with its own rituals. One is expected to post their losses (or gains) with their positions and then face the peanut gallery. 

Rubbing salt in the wounds is common ("Does your sell button not work?"), as are crude comments about one's "wife's boyfriend." Less prevalent, but still notable, are the genuine words of encouragement when one's despair appears profound enough. 

"Lot of people asking if I'm okay. Honestly, not really. It's going to take a long time to recover financially, and maybe even longer emotionally, knowing how much damage I've done to my own life in more ways than just the money," said one Reddit user who claimed to have lost $28,000. 

"Your d*** still works...You'll feel like s**t for a while, rightfully so, but set yourself a small goal and go achieve it," counseled another. 

Scroll around Wallstreetbets long enough and you'll inevitably find those in the throes of what can only be seen as a possible gambling addiction. 

One Reddit user posted a screenshot of a $134,000 loss titled "YOLO is a hell of a drug! Farewell boys," describing themselves as a healthcare worker who had gambled away years of savings on YOLO trades. In the comments on their farewell post, they described the mindset that led them from being a "rational investor" to gambling their life savings on options trades. 

"I just [wanted to] break even. If I break even I'll stop. And you never do. Overly aggressive, over margined YOLO plays after that. I study and stared at the charts every trading day in day trading grandeur, thinking my probability has increased that much more from my first big win... Desperate option plays at the end."

"I went from a rational investor to some sick irrational desperate gambler."

Weeks after their "farewell," they were back on the site. 

"No emergency fund. No retirement," they wrote. "And lost my last check on a credit spread."

A massive new audience

WallStreetBets' burst into the mainstream has left it in uncharted territory.

There are the legal questions surrounding the site's collective push to boost GameStop's shares, with the SEC announcing in a statement that it is "aware of and actively monitoring" the volatility of the markets.

The White House and newly sworn-in Treasury Secretary Janet Yellen are "monitoring" GameStop's stock bonanza and WallStreetBets briefly went private on Wednesday, as the moderators made the site private to "ensure Reddit's content policy and the WSB rules are enforceable." On Thursday, Robinhood, the trading platform of choice on WallStreetBets, made a controversial move to limit trading on GameStop, AMC, Nokia and other stocks promoted on the subreddit.

Reddit said in a statement to CNN Business that its "site-wide policies prohibit posting illegal content or soliciting or facilitating illegal transactions. We will review and cooperate with valid law enforcement investigations or actions as needed." 

And even if the forum survives scrutiny — whether regulatory, legal or from Reddit — it will have another issue to contend with. When part of the draw of a place online is the community, the shared language and jokes and memes, what happens when new people unfamiliar with any of that come suddenly flooding in? 

With WallStreetBets' campaign against Melvin Capital now gracing the front pages of newspapers, those who have been burned by WallStreetBets' advice in the past are finding the allure of striking it rich on weekly options trades hasn't fully disappeared.

Omar, the pre-med student who lost tens of thousands of dollars on weekly options trades, told CNN Business that he is back on WallStreetBets, trying to recoup what he lost trading money from his student loans last year. He'd bought one GameStop option which shot up to $10,000 from $7,000 amid Wednesday's rally.

"There is a pandemic. There is nothing to do. I can't party. I can't go outside, and the prospect of making a little money sounds really good,"Omar reasoned.

"What's not to like?"