Deltec Bank & Trust, a leading financial hub for global investors, financiers and entrepreneurs, recently delved into the recent surge in retail investing and the dangerous game many may be playing in its latest research note titled “Robin Hood-Winked” (http://nnw.fm/6Y4yE). A recent article discussing this reads, “Deltec Bank’s research team identified a number of disquieting trends resulting from the retail investment surge. Led by popular online personalities touting the axiom that ‘stocks [can] only go up,’ retail investors have adopted an exceedingly positive bias, bordering on pure speculation. In the options market, the ratio of outstanding call options to put options, indicating bullish vs. bearish bets, rose to 2.8 times (a level that has only been exceeded twice in the past five years) (http://nnw.fm/pCn6V). Worryingly, the extent of this speculation has reached the stocks of companies that have filed for bankruptcy. The rental car company Hertz was a key example illustrated by the bank; after filing for bankruptcy on May 23, Hertz’s share price fell to nearly $0.50 per share. Nevertheless, retail investors flocked to the company, attracted to the low share price on offer, and the stock rose by over 574% in a single week. The fact that the shares were effectively worthless didn’t seem to matter, and Hertz almost got away with selling retail investors another $1 billion of worthless stock before the SEC stepped in.”
To view the full article, visit http://nnw.fm/LXN4p
About Deltec International Group
Deltec International Group is a diversified, independent, financial-services group that provides, through its member companies, a range of private-banking and fiduciary expertise, fund administration, investment management, digital-asset financial services, insurance solutions, and corporate- and merchant-banking capabilities. Deltec Bank & Trust is the flagship company of Deltec International Group, serving the unique needs of global private, corporate and institutional clientele. For further information, please visit www.DeltecBank.com.
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