Question of the Day (REPEAT): A recent research study found that _________ of stock day traders made money over a 12 month period.

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Feb 02, 2021
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Question of the Day, Investing, Research, Behavioral Finance

Given the events that have transpired over the past week with GameStop, this QoD provides great opportunity to discuss the perils of day trading. 

Answer: 3%

Questions:

  • Why is day trading so popular despite the difficulty of making money consistently?
  • Why do you think it's so difficult to make money day trading?  
  • Do you know anyone who has actively traded stocks? Were they successful for more than a few days?
  • What's the difference between investing and speculating?  

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (CNBC):

A study published in June of almost 1,600 Brazilian day traders that tracked their activity for one year concluded that only 3% made money. The authors avoided claims that day traders can make money over short periods of time (a day or a week), and concentrated on day trading activity over longer periods.

Their conclusion: “We show that it is virtually impossible for individuals to day trade for a living, contrary to what course providers claim. 

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Want to use GameStop as a "teaching moment?" Here are some resources and professional development opportunities: 

Resources

Professional Development

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.