Study Finds Finfluencers Trigger Short-Term Options Price Spikes
Researchers found that paid Discord finfluencers trigger immediate options price spikes through follower herding, though most subscribers suffer negative returns after costs.
A study by researchers from Oklahoma State University, Emory University, and the University of Kentucky found that financial influencers, or finfluencers, on paid Discord servers trigger immediate short-term price spikes in US options trading. Retail buying surges almost instantly following a recommendation, with prices rising an average of 3% and retail volume jumping roughly 14.5 standard deviations above normal.
Brian Roseman, an associate finance professor at Oklahoma State University, and his colleagues determined that these price increases are driven by the herding behavior of followers rather than the skill of the influencers. The research indicates that these effects typically vanish within two hours, and returns for subscribers are generally negative once transaction costs are factored in.
Legal experts noted that while these services often blur the line between social media commentary and regulated financial advice, current law enforcement typically does not classify such recommendations as formal financial advice unless they are fraudulent.
