HODL: The Hold of Reddit Over the Stock Market

WallStreetBets (WSB) became the center of attention among all the social media outlets following the Gamestop short squeeze incident in 2021. Naturally, this raises scientific queries about how much WSB has since sustained its influence on the stock market. With Reddit and other social media networks, prior efforts have concentrated on evaluating textual sentiment impacts using lexical or conventional machine-learning approaches. However, the natural language processing landscape has evolved remarkably with the introduction of large-scale language models, and it remains to be seen how much these models can help scrutinize Reddit’s impact on the market participant. This research offers a BERT-based sentiment scoring approach tailored specifically for the text used in Reddit’s wallstreetbets community. We anticipate that this will encourage future studies in financial literature to use pre-trained language models for text analysis.

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