Consensual Hallucination

By Wolf Richter – Wolf Street

So the trading volume on the Nasdaq, that everyone looks at as a sign of market dynamics, is massively inflated by these ridiculous penny-stocks that are so slow in getting delisted.

“Fueling these frenzies are individual investors who use zero-commission trading tools to pile into stocks that get buzz on social media,” the WSJ says.

“When such stocks trade for pennies a share, it is easy for day traders to place enormous bets on them. Then the high volumes themselves become a source of buzz, with the stocks appearing on leaderboards of heavily traded stocks where other investors take their cues,” the WSJ says.

Ah yes, what we’ve come to call consensual hallucination. We mean, there are no victims here, just people seeking fun and thrills and getting cleaned out in the process. But it is disconcerting that the universally cited market volume numbers are becoming meaningless.