The world of stocks can be confusing, and there are often stock ticker symbols used that you may not be aware of, especially if you’re new to trading stocks.
With new stocks becoming available every day, and the popularity of stocks fluctuating massively, it can be difficult to keep a track of what each stock sticker symbol means.
A stock that has become particularly popular in the past few months and has made headlines more than once is GME.
So if you’re unaware of what GME means or perhaps what all the talk surrounding it has all been about, read further onwards to learn more!
What Does GME Stand For?
GME is the stock ticker symbol for the American video game retailer GameStop, which saw a heavy decline towards the mid to late 2010s as the shift away from brick and mortar video game stores and towards the digital purchasing of games began.
Why Is GME Popular?
GME became extremely popular as of 2021 due to it becoming somewhat of a “meme stock” on the subreddit “r/wallstreetbets”.
Where one user noticed that the stock was illegally shorted after the decline of the stock had meant that it had been taken advantage of, and had become over-sold (see also ‘What Are Oversold Stocks?‘) and over-borrowed.
The members of r/wallstreetbets then banded together to purchase a large number of shares of GME at the same time, causing there to be a squeeze on the stock, and inflating the stock’s price by 1,700%.
This caused large ramifications for the hedge funds that had been massively short selling the stock and led to many of the trading apps halting the sale of GME.
Which was not received kindly by amateur traders, who believed that they were halting the sales in order to protect Wall Street hedge funds, and were therefore manipulating the market.
This dramatic episode lead many to question the nature of the free market and how hedge funds operate, and some of the trading apps, such as Robinhood (see also ‘How To Transfer Money From Robinhood To Your Bank Account‘), have even had lawsuits opened against them as a result.
What Is A Stock Ticker Symbol?
A Stock Ticker Symbol is simply an arrangement of characters, mainly letters, that represent publicly traded securities on exchanges.
These symbols are available to be selected by companies when it first issues securities to the marketplace, and the symbol tends to be related to the company’s name.
These Stock Ticker Symbols are what is used when investors and traders place orders for trading stocks.
Sometimes these symbols also have additional letters attached to them that help indicate characteristics such as trading class or restrictions.
What Is Short Selling?
Short selling essentially allows traders to benefit from a stock performing badly, a trader borrows a security and then sells it on the open market, and then purchases it at a lower price, allowing the trader to take the difference after paying back the initial loan.
It might seem incredibly simple, but short selling is an incredibly risky way of waging your money and actually includes a ridiculous amount of liability, standard trading can mean you lose up to 100% of your investment (see also our guide to greenfield investments).
But because a stocks price can keep rising, it means that when you short sell there is actually no limit to the amount of money you would have to pay back.
There is a lot of preperation and forecasting required in order to short sell successfully, and you should consult an expert instead of blindly jumping in.
But if you trust your instincts and believe a stock is going to decrease in value, then short selling can be an excellent way to make a profit.
How To Buy GME Stock?
As with any stock, buying shares is incredibly easy, and you can buy GME stocks just by following a few simple steps:
Find An Online Broker
Your first step will be to find an online broker that allows you to buy shares in GME, because not all brokers have access to the NYSE (New York Stock Exchange), you obviously has to find one that can give you this access.
Additionally, some brokers don’t allow accounts from individual investors, and some will charge you to buy shares, so it is important to establish what kind of broker you want to be dealing with.
If you already have an account with a broker who has access to GME and the NYSE then you obviously skip this step.
Deposit Your Money
The next step is to add money to your account, which can be done through various different methods depending on the broker you’re buying with.
Some accept different electronic wallets such as PayPal, but as a general rule, all brokers will accept debit and credit cards for depositing money.
Buy The Share
Once your money is into your account, it is now time for you to buy your shares, simply find the GME share, and select how many shares you wish to purchase.
Once you have clicked purchase, you’re done! When placing an order, don’t forget that you can differ your order type, a market order purchases the share at its market price.
Whilst a limit order allows you to be specific with the exact price you want to purchase the share at.
Monitor The Price
Purchasing shares isn’t a surefire way to making a profit, it’s vital that you regularly check your portfolio for any increases or decreases in the price of the shares you own, and either hold or sell as and when you see fit.
Purchasing shares can be risky and the liability for any money lost is your own. So do bear this in mind when deciding whether to sell or hold on the investments you make.
If you enjoyed this article, you might enjoy our post on ‘What Is A Pullback In Stocks?‘.
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