Hedge Funds Approach Robintrack to Keep Eyes on Tiny Investors
Hedge Funds Approach Robintrack to Keep Eyes on Tiny Investors
(Bloomberg) -- The site that tracks trading activity at retail brokerage Robinhood has attracted the attention of Wall Street.
Hedge funds and other traders are looking to aggregate Robintrack.net data that shows how many accounts own any given stock, according to the site’s founder, Casey Primozic. The stats provide real-time insight into where amateur stock pickers are sending their money, potentially useful information for professionals who build fancy models to make their own bets.
“There are some patterns, and I definitely know people have at least looked into creating some kind of algorithms using this data,” Primozic said Thursday in a Bloomberg Television interview.
With sporting events canceled and casinos at diminished operations, retail traders have poured onto Robinhood by the thousands. While it’s not clear how much influence the cohort has on market moves, Citadel Securities, which executes a large swath of retail trades, said that as much as 25% of the market can be comprised of such volumes on peak days -- but that they’re unlikely to move market levels.
“I’ve gotten plenty of emails from hedge funds, prop firms, other financial institutions who are interested in the data,” Primozic said. “There’s definitely a lot of interest from these larger firms trying to get a feeling for what the broader market is doing.”
Yet some stocks have seen outsize interest. Tesla Inc. saw 14,000 Robinhood traders jump into the stock on Thursday after the electric-vehicle maker reported earnings the day before. Tens of thousands of people had poured in during prior trading periods.
Primozic said the latest fad is biotech stocks, with the greatest interest in Pfizer Inc. due to hopes of a Covid-19 vaccine. Robintrack data show more than 40,000 Robinhood users have added the stock to their accounts in the last 24 hours.
As far as using the data for trading strategies, “it’s definitely not going to be enough to create a killer strategy on its own,” Primozic said. “But that being said, there’s definitely some kind of value in it, I feel like. There wouldn’t be that much attention if there wasn’t.”
©2020 Bloomberg L.P.
