Meme stocks have once again been taking the trading world by storm and that goes for the experienced traders and also newbies wanting to dip their toe into the market. Even people with no interest in momentum trading or swing trading will have seen the impact of meme stocks, in particular, the recent explosion in the value of Gamestop’s stock price.
You could argue that meme stocks are very similar indeed to momentum trading, and also swing trading, which is something we want to cover in this short article.
What Is a Meme Stock?
Put very simply, a meme stock involves the share price of a company getting pushed up significantly by individual investors beyond any fundamental justification.
The push normally comes from a bull raid [https://wallstreetprints.com/collections/canvas-art/products/s-p-500-bull] from users on Reddit or Robinhood - normally you would find that the ones with single digit prices are the ones that are shorted, betting that the price will drop even further.
Once the price of these stocks have dropped, they then buy the stock back at the lower the price with the borrower eventually pocketing the difference.
In earlier, more simpler times, this would have been labelled up more as momentum trading [https://wallstreetprints.com/collections/new-releases-semi-gloss/products/momentum-trading-semi-gloss-print]
Why Meme Stocks?
The Gamestop phenomenon has been a success for multiple reasons. First, for momentum traders and swing traders a like, the stocks were very attractive to start with; especially from an entry level pricing point.
Secondly, the thing that makes ANY meme stock a good option is their popularity. There is a very good reason whey they are called meme stocks and that is because they go viral; even if the whole thing was intended as a joke.
Which is why meme stocks are an ideal opportunity [https://wallstreetprints.com/collections/canvas-art/products/opportunity-is-calling-bullish-version] for both newbies and seasoned investors.
Although I don’t want to focus too much on the Gamestop explosion, as there have been many other meme stocks that have taken off over the years, but what we soon saw with this bullish push was the fact that it attracted complete newbies into trading too.
We saw individuals whom had always wanted to invest but never truly knowing where to start finally getting into action, and investing. Sure, some people have only profited small amounts of money, however others too have gone on to make lots of money and decided to trade more and more - even decorating their offices and rooms with investing inspired art work [https://wallstreetprints.com/collections/canvas-art]
Quite recently, we have seen the Wallstreetbets Subreddit [https://www.reddit.com/r/wallstreetbets] has been collectively driving other stock including Blackberry, AMC and also Nokia.
To indicate the true power of meme stocks, the Blockbuster Video stock jumped up more than 700% in recent weeks also.
It goes without saying that the stock market is a volatile place with no guarantees.
If you are new to trading, and we welcome you in with loving arms, then remember that there is no guarantees and no promises. Sure, you can study, research and of course our range of art work [https://wallstreetprints.com/collections/semi-gloss-prints] can really help to motivate and inspire you, but just remember that there will always be a risk with trading.