The Trading Pit Reopened in a Chat Window

A photograph held by the Library of Congress, dated on Wikimedia Commons to 1920, shows the wheat pit of the Chicago Board of Trade at a moment of peak noise: dozens of men in suits and hats, arms raised, fingers raised, a chalkboard behind them reading “wheat closing.” Nobody in the frame is explaining anything. The lesson was the room.

For most of the twentieth century, that was how you learned to trade. You did not take a course. You carried paper. In a 2007 review of Caitlin Zaloom’s book on the Chicago pits, Out of the Pits, Donald MacKenzie notes “the importance of an informal apprenticeship, working as a poorly paid clerk or runner,” and observes that because lenders would not back beginners, traders “usually had to find others prepared to back them financially.” The apprenticeship was also an audition. Senior traders watched the runner, and the runner learned by watching them.

That model is back, though the room is now a Discord server and the paper is a screenshot. The evidence is stronger than most debates about it admit, and so is the case against it.

Where the lessons come from

The most recent large measurement comes from the FINRA Foundation, which reported in April 2026 on the investor component of the 2024 National Financial Capability Study. Sixty percent of investors aged 18 to 34 use social media, against 9 percent of those 55 or older. Sixty-one percent of the younger group had made an investment decision based on recommendations from social media personalities; among the oldest group the figure was 6 percent. The release does not state a sample size.

Other surveys point the same way, with different populations. The Oliver Wyman Forum, in a survey of about 300,000 investors conducted over five years, found that social media was the most common reason Gen Z investors (55 percent) and millennial investors (44 percent) gave for getting into investing, according to Fortune’s January 2026 account. And on crypto, a Pew Research Center survey of 8,512 U.S. adults fielded January 20 to 26, 2026 found that 38 percent of men aged 18 to 29 had ever invested in, traded or used cryptocurrency, compared with 15 percent of women the same age and 19 percent of all adults.

These numbers describe different questions and should not be added together. What they share is direction. A large share of young people with money in markets learned that markets exist, and what to do about it, from a feed.

What the schools are doing

The school system is not absent so much as late. Next Gen Personal Finance, the advocacy group that tracks state requirements, said in March 2026 that the number of states requiring a standalone, semester-long personal finance course for graduation “has grown from six states to 30 states” since 2019, covering 76 percent of U.S. students. It named New York and Maryland as states that have yet to mandate the course.

Six states in 2019 is a small base, and the figure describes a requirement, not what is taught in the course or how well. Set it beside the FINRA numbers above, and a semester in a classroom looks like one voice among many competing for the same attention.

The steelman

The skeptic’s first mistake is to assume the people on these servers are passive. The FINRA research cuts against that. Investors who use social media consulted an average of 7.6 information sources, against 4.0 for non-users, and 36 percent of them checked a financial professional’s background, against 14 percent of non-users. They were also more likely to cite entertainment (59 percent against 18), social activity (59 against 11) and supporting personal values (66 against 31) as reasons to invest. Gerri Walsh, the Foundation’s president, put it this way: “social media is a significant resource for investors, but it comes with both potential benefits and costs.”

The apprenticeship analogy is more than a flourish. A guild, a pit and a Discord share three features: learning is social, it happens in public, and the learner is allowed to start before he or she understands. Rhodri Preece of the CFA Institute made the structural point in 2024, in a press release accompanying a report on finfluencers in five countries: “Finfluencers now play an increasingly significant role in educating young people about finance.”

What the pit had that the chat does not

The trouble is in the word “apprenticeship.” In the pit, as MacKenzie describes it, the apprenticeship doubled as a screening process: the people who might back a novice could watch the clerk work first and decide whether he was worth the money. The learner was observed by the people with capital at stake.

The online version has the lessons without the screen. The CFA Institute’s report analyzed 110 pieces of content from finfluencers in the United States, the United Kingdom, France, Germany and the Netherlands, posted on TikTok, YouTube and Instagram. Of those, 45 percent offered guidance, 36 percent included investment promotions and 32 percent included investment recommendations. Fifty-three percent of promotional content carried a disclosure, but only 20 percent of recommendation content did, and 27 percent included an affiliate link. Preece warned that “some investors may be unaware when and how finfluencers are being paid to promote financial products.”

Whether the advice works is a separate question, and the answer from the research so far is unflattering, with caveats. A 2025 study in the International Journal of Consumer Studies by Dirk Gerritsen and Anouk de Regt hand-collected 453 recommendations from 21 Dutch financial influencers, each with more than 1,000 followers, covering 243 stocks and 61 cryptocurrencies. The authors found that influencers “tend to recommend financial assets that have demonstrated strong performance in the recent past,” and that returns after the recommendation were typically negative. A preprint called VideoConviction, posted to arXiv in June 2025, annotated finfluencer videos for stock picks and the speaker’s conviction. High-conviction picks beat low-conviction ones but still trailed the S&P 500 index fund; betting against the picks beat the index by 6.8 percent in annual returns, though with more risk (a Sharpe ratio of 0.41 against 0.65). Both studies look at influencers’ calls rather than at what any particular follower did, and the second is a preprint. Neither says that every channel fails.

The gap that matters shows up in the FINRA data. Social media users and finfluencer followers answered an average of 42 percent of objective investment knowledge questions correctly, and 63 percent rated their own knowledge as high. Among those targeted for fraud, 68 percent of social media users and 69 percent of finfluencer followers reported losing money, against 29 percent of non-users and 26 percent of non-followers. The release says the combination of low knowledge, high confidence and fraud vulnerability “raises serious concerns.” It cannot say which way causation runs: people who are more exposed to pitches, or more willing to act on them, may simply self-select into these communities.

A central bank economist offers a structural reading. David Russ, in a Bundesbank discussion paper from October 2025, models retail traders who coordinate through platforms such as TikTok and WallStreetBets. Calibrated to retail correlation data from a prior study, the model finds that social trading raises retail investors’ losses by 5.1 percent relative to a world without it, and concludes that it “harms retail investors to the benefit of professional investors such as hedge funds.” It is a model, not a measurement of any one community, and it depends on its assumptions. But it names the mechanism: a crowd that learns together also buys together, and someone is on the other side.

The enforcement record

Regulators have started to treat the teacher as the regulated party. In June 2025 the UK’s Financial Conduct Authority led a week of action with eight other regulators from Australia, Canada, Hong Kong, Italy and the United Arab Emirates. It reported three arrests, 50 warning alerts and “over 650 take down requests on social media platforms.” Steve Smart, the FCA’s joint executive director of enforcement and market oversight, said the message “is loud and clear.” The FCA does not name those arrested or charged in the release.

In the United States the most vivid case predates the current cycle. In December 2022 the SEC charged eight people over what it called a $100 million stock manipulation scheme promoted on Discord and Twitter. The SEC said seven of the defendants had built followings in the hundreds of thousands across trading chatrooms and urged followers to buy stocks while selling their own shares without disclosing the plan. These are allegations, and the release says a parallel criminal case was filed. It is a single case, and the FINRA and CFA findings do not rest on it. But it shows how little separates a teacher from a promoter when the chat is paid for by attention and the student pays tuition in losses.

The turn

It is tempting to frame the choice as school against Discord, and to wait for the curriculum to win. The evidence suggests the contest is the wrong one. The curriculum is arriving, in 30 states and counting, and the Discord is not going away. Young people want to learn this subject among people who are doing it, and they are right that this is how trades have always been learned.

What the pit had, and the server does not, is a person whose job was to notice. The clerk who watched a novice, the backer who withheld capital, the senior trader who knew who “did size” and who did not: none of them was a teacher. They were auditors who happened to be teaching. Nothing in the data suggests that young people have rejected supervision. They have been given a school with no one watching the work, and they are paying for it at the speed of the feed.

Not financial advice.