Ever since the dawn of the Internet, like-minded individuals have gathered in online chat rooms (among the more sophisticated, they were known as "forums") to share gossip and insights about their hobby. Coupled with the dawn of the discount brokerage in the early 1990s and a blistering boom in tech shares, and the groundwork for a new class of digital day traders had been laid.

To acknowledge the drop in trading fees on some of the biggest electronic discount trading platforms (an innovation spurred by the millennial-focused RobinHood), Bloomberg on Thursday published a wild story about one day trader's prodigious string of luck. In a span of just two trades, Eddie Choi, an amateur trader who hangs around the Reddit community "WallStreetBets" (profiled by MarketWatch back in the spring of 2016), turned an initial $766 investment in Roku puts into $107,758. That's an ROI of roughly 14,000%.

Here's how it started: First, Choi plunked down $766 on out-of-the-money Roku puts. On Sept. 20, shares of the streaming-service provider sunk 20%, leaving Choi's options with a value of $50,553. In an instant, the options went from worthless, to extremely valuable, while catching any traders who thought they could make a quick buck by shorting the contracts into expiry in a brutal short squeeze, according to Bloomberg.

But instead of walking away with his winnings (a roughly 6,500% gain), Choi embraced "WallStreetBets" "YOLO" aesthetic and plunked it all down on another risky trade: A few days later, Choi bought more puts, this time they were puts tied to the S&P 500 exchange-traded fund that trades under the ticker "SPY". That fund is one of the most popular ETFs in the world. But just to be clear: Choi wasn't buying shares of the ETF directly. He was buying options tied to the SPY ETF.

On Sept. 24, the first time the fund closed below $297 in more than two weeks, Choi's putts with a strike at $297, which were set to expire the next day, saw their value soar as the price of one share of the index slid to under $296. This left his options with their final value - roughly double the investment he put into the options the day before.

Before talking to the BBG reporters who interviewed him for this story, Choi credited luck, and his friends on WallStreetBets, for helping him learn the game.

"I use it to develop my watch list,” Choi said. “Of course, there are threads where people are just trolling, but you can find good entry points."

Just check out this example from one of Choi's friends on the forum explaining why the VIX hasn’t really soared during the trade war yet (though we've had a few intense periods).

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BBG verified all of Choi's winnings via screenshots from his RobinHood account.

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Of course, Choi is sitting pretty with his cash winnings. But there are thousands of traders like him who got burned piling into BTC earlier this year at $12,000, or buying Uber and Lyft during the IPO.

According to the terminology of WallStreetBets, we call these men bagholders.

By Zerohedge.com