How to Buy GameStop Shares: Invest in Gamestop stock (GME)

It all started in Reddit, a social news website and forum where people can discuss whatever they feel appropriate within different communities. More precisely, Gamestop was resurrected on the sub-Reddit Wallstreetbets.

Some users noticed that Gamestop had a short interest of around 140%, meaning that stocks had been sold short, re-lent and shorted again. Short interest is the percentage of shares that have been sold short (sold by people that had to borrow those shares) but have not yet been covered or closed out.

This is the perfect environment for what is called a short squeeze, a phenomenon where short-sellers are forced to repurchase stock as prices rise, thereby pushing the price higher.

Imagine the following: you ask your broker borrowed shares to sell in the market and wait for it to go down, repurchase and give back the shares to the original loan. This strategy gives you a limited upside (the company going broke and you repurchase the stock at $0) and an unlimited downside (the stock can get higher indefinitely). With a short interest of 140%, a little buy pressure is enough to make everyone rebuy their shares to minimise their losses, but when everyone does it… Yeah, a spike occurs!

Another exciting part was that those short-sellers were mainly hedge funds, so it was pretty amusing to see the “little guy” dominating the “big boys” in their own game.

1. Find a good online broker. Some factors you should consider when choosing an online broker are the range of products it allows you to trade, the fees charged, if it is regulated by top-tier institutions, among others.
2. Open your brokerage account.
3. Complete your registration.
4. Fund your account. Some brokers require a minimum deposit.
5. Place your trade. Use the broker search bar to find GME stock, choose the number of shares you wish to buy, the order type (market or limit order), and place the “trade” button.

Without a doubt, the GameStop frenzy has diminished since January 2021. However, the implied volatility is still over 100%, which is pretty high and gives opportunities to participate in GameStop stock price swings.

We haven’t seen a comeback to the levels before January 2021, which indicates that the interest is still there, but please keep in mind that the momentum on the stock may vanish at any moment.

Finally, the company’s fundamentals may diverge from what the stock markets indicate. The likelihood of irrational behaviour in GME trading activity is not to belittle. It’s a question of belief in what the videogame retailer could become versus what it currently is.

The primary goal of the Wallstreetbets community has been reached: smash the hedge fund managers who tried to earn money with the downfall of Gamestop. In the process, many retail investors, people like you and us, were able to pocket massive gains!

What matters is what happens from now on. The company is trying to reposition for a digital era. Traders bet the company can remake itself. That might be some digital videogame purchasing system or some hope the company will pivot into popular online gaming streaming.

The environment is a challenging one. If you believe the stock has upside potential or you just want to take some short-term opportunity through positive or negative sentiment, please make sure you are fully aware of all the risks involved.

The firm sees a significant market opportunity by presenting an alternative to what it views as the liberal-minded media establishment. Nonetheless, make sure you do your own due diligence!