Wall Street Fixates on a College Side Project Tracking Robinhood

(Bloomberg) -- Two years ago, Casey Primozic was wrapping up his undergraduate years at Valparaiso University in Indiana. He was also building a website -- for fun. Little did he know it would grow into a Wall Street obsession.

Now in 2020, his college side project, Robintrack.net, has seen site traffic explode as everyone from day traders to institutions flock there for a picture of what retail investors are buying. Primozic says there’s evidence hedge funds are scraping his data. The 23-year-old programmer can hardly keep up with an overflowing email inbox and is getting barraged with pitches from advertisers.

“I’ve never really had anything I built really pop off in popularity quite like this,” Primozic said by phone from Seattle, where he works as a software developer for an early-stage tech startup. “It’s been an experience, for sure.”

Built in three months, Primozic’s aggregator has become a force unto itself in the rally engulfing U.S. equities, holding a mirror to the buying and selling decisions of small-time stock jocks and, arguably, amplifying their impact. The site solves a problem that has long vexed Wall Street’s intelligence-gathering machine: figuring out what retail investors are doing in real time. It’s also sparked a raging debate over how much little-guy investors are driving the gains.

Robintrack isn’t affiliated with the Robinhood investing app, but uses information gleaned from it to show trends in positioning among the brokerage’s users. Every hour, Robintrack downloads popularity data for every stock from Robinhood via a public application programming interface, or API. To Primozic’s knowledge, no other brokerage provides this data publicly and directly -- making Robinhood users a proxy for all individual investors.

Robinhood displays stock ownership data publicly for informational purposes, according to a company spokesperson.

That data is at the center of efforts to judge the role of retail day traders in the epic stock rally since late March. At minimum, it’s evidence they have been on the right side of a lot of improbably good trades. Robintrack shows hundreds of thousands of accounts opening in everything from cruise lines and airlines to bankruptcy stocks, many of which have surged.

Anywhere between 20,000 and 50,000 unique users now visit Robintrack on an average day, according to Primozic. Before this year, a typical day would only see up to 4,000 visitors. In the seven days before Monday, the website attracted 167,000 unique users and 286,000 separate sessions. The spike began back in late April, as Robinhood users piled into the United States Oil Fund LP (USO) amid negative crude prices.

While sharing similarities with other sets of bespoke consumer data that has come to captivate quants globally, Robintrack’s ease-of-use has made for a broader impact. For the last few weeks, anyway, it’s created a kind of observation effect in markets, particularly at their speculative edge, where the sight of retail accounts ballooning in this or that small cap is taken as a signal by others that they should dive in as well.

There’s a “cult of Robinhood watchers developing,” according to Peter Tchir, head of macro strategy at Academy Securities. SocGen quant strategists led by Andrew Lapthorne wrote in a note Monday: “The number of ‘odd’ trades coupled with the availability of Robinhood data via Robintrack.net, has increased the noise level.”

Robinhood itself posts the number of account holders who hold any individual equity on that stock’s page, something that none of the other retail brokerages do. Primozic’s program simply aggregates that data into a broad snapshot.

“It’s accountable, they’re data from Robinhood -- there is no guessing going on,” Benn Eifert, managing partner of QVR Advisors, said of the Robintrack platform. “That’s a relatively unique thing about Robinhood relative to TD Ameritrade or Schwab or something, where most brokerages don’t provide that data. Robinhood just does.”

The traffic increase at Robintrack has been so large that Primozic has had to make a couple changes to the site’s operations to keep up with the overflow. Visitors to the site aren’t just perusing. Rather, many are pulling the available data into their own programs.

“These days, especially, there’s at least three or four people who will run these scrapers at any given time,” he said. “I’ve actually had to limit the rate at which they can do it just to prevent them from overloading my hardware.”

Primozic claims he’s seen evidence that users at hedge funds including D.E. Shaw & Co. and Point72 have looked into or are directly collecting data from Robintrack. Representatives of the firms declined to comment on whether they’re plugging into Robinhood.

“It’s certainly a thing,” said Larry Tabb, Bloomberg Intelligence’s head of market structure research. “We are seeing more of this through social investing, where folks either post their own trades or firms broadcast folks’ trades. This can be looked at in two ways, first as a self-fulling prophecy -- i.e. pump and dump. Or, it’s providing the market the same information that their execution partners have.”

Compliance representatives at large Wall Street banks have also contacted Primozic, he says, asking how he sources the data to figure out how they themselves can use it legally.

“To be clear, that’s totally fine with me. I allow the data I collect to be used freely for any purpose,” he wrote in an email. “It was neat to see that the institutional investors are interested in the data just the same as everyone on Twitter.”

There’s an ironic subplot to Primozic’s success with Robintrack. Shortly after releasing the website to the public back in May 2018, folks at Robinhood caught wind. A recruiter from the investing app reached out to Primozic, and the company flew him out to interview for a job.

He didn’t get it.

“Unfortunately did not make the cut,” Primozic said. “It was one of my first real interviews.”

©2020 Bloomberg L.P.