skip to main content
Market News Posted by Team Topstep February 4, 2021

Lessons from the GameStop Robinhood Saga

GameStop’s soaring stock price and the David versus Goliath narrative of retail traders up against massive hedge funds dominated the trading news this past week. So, what actually happened? On this special edition of Limit Up!, Jack, Dan, and John Doherty discuss how posts on the WallStreetBets Reddit page blew up the market and how Robinhood failed its first stress test. Tune in for all the details.

Full Show Notes

Unless you’ve been living under a rock this week, you have no doubt heard about the GameStop stock drama. What started as a once in a lifetime opportunity to get rich quickly became a David versus Goliath story of retail traders rebelling against massive hedge funds.

Limit Up! is taking a short break from our trading fundamentals series to bring you all the details behind Wall Street’s story of the week. Jack, Dan, and John Doherty give a recap on how GameStop blew up, how a short squeeze works, and what sort of repercussions are likely in store for the trading app Robinhood. Tune in for Topstep’s take on this volatile week.

  • (00:45) – Mechanics of short squeezes
  • (05:14) – Zero-commission trading
  • (06:49) – Float and short interest
  • (10:51) – Role of short sellers
  • (20:34) – Effect on futures and forex
  • (26:31) – Industry change
  • (34:21) – Astroturf

About Limit Up!

Limit Up! is a podcast brought to you by Topstep about trading, trading psychology, trading life, and pretty much whatever else the wonderful world of markets has to offer. Two former professional traders host it, Jack and Dan, who still dabble in futures, forex, options, political betting—they basically love to follow the action. They’ll teach you how to trade, but more importantly, how to develop the habits that make traders good. Risk Disclosure:

Topstep is the premiere funding opportunity for traders looking to make the most market opportunities without risking their own capital. When traders pass the completely-objective Trading Combine®, Topstep funds them with proprietary money. Guaranteed. Beyond funding, we seek to instill better habits in our traders (hence the Limit Up! Podcast and other educational resources). Topstep has been based in Chicago since 2012.

Jack Pelzer is a co-host of Limit Up! He traded as part of a U.S. Treasury group for 7 years at Chopper Trading and DRW. After leaving the industry, he became a Writing Fellow and Senior Contributing Writer for The Onion. He is now the Head of Content at Topstep.

Dan Hodgman is a co-host of Limit Up! Before coming to Topstep, Dan traded 30 Yr Treasury Options and Yield Spreads. Before that, he served in the United States Marine Corps, where he simultaneously managed his own Futures Account, applying the skills he grew up learning from clerking on the trading floor. Now Dan works with the Traders here at Topstep as a Performance Coach and is a regular on the Daily Market Recap.

If you’d like to receive new episodes as they’re published, please subscribe to Limit Up! in Apple Podcasts, Google Podcasts, Spotify, or wherever you get your podcasts. If you enjoyed this episode, please consider leaving a review in Apple Podcasts. It really helps others find the show.

Podcast episode production by Dante32.