Meme Stocks: Get in on the world’s most hyped investment trend

  • Meme stocks are reshaping the trading industry

    Meme stocks are reshaping the trading industry

  • The jury is still out on whether the meme stock trend is good or bad for the industry, but the topic keeps making headlines and the trading volume for meme stocks is significant. The market is volatile and unpredictable, so make sure you do your research before jumping on the bandwagon.

InstrumentClassicPlatinumVIP
GameStop Corp.
GME:xnys
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
ContextLogic Inc.
WISH:xnas
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Nio Inc.
NIO:xnys
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Tesla Inc.
TSLA:xnas
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
AMC Entertainment Hold Inc.
AMC:xnys
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Workhorse Group Inc.
WKHS:xnas
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Rocket Companies Inc.
RKT:xnys
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Wendys
WEN:xnas
0.02 USD min. 7 USD
0.015 USD min. 5 USD
0.01 USD min. 1 USD
Instrument
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details
Classic
0.02 USD min. 7 USD
Platinum
0.015 USD min. 5 USD
VIP
0.01 USD min. 1 USD
More details

The prices above are indicative and will vary according to the country of residency. A full overview of exact pricing is available through the platform trade tickets.

* For shares priced under USD 10, 0.01 USD/share, min USD 4, max USD 100
** For shares priced under USD 10, 0.007 USD/share, min USD 3, max USD 100
*** TSE/TSX: For Stocks traded below CAD 1, commission is CAD 20 per trade. For Stocks traded above CAD 1, commission is 3 cps, min CAD 20.
**** TSE/TSX: For stocks traded below CAD 1, the commission is capped at CAD 15 per trade.
Note: All equities, bonds, futures and options commissions will be charged with the prevailing Goods and Services Tax (GST) of Singapore. This is applicable to SG residents only.

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With Saxo you can buy meme stocks at competitive prices. Choose the pricing plan that fits your needs and trading volume.

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There is more than just one way to trade meme stocks. Go long or short by trading meme stocks with leveraged products or options.

But what are meme stocks anyway?

Meme stocks took over the mainstream media at the beginning of 2020 thanks to GameStop’s crazy rise on the financial market and its ever-looming short squeeze. Retail investors rallied together to make money at the expense of Wall Street short-sellers. For the past few months, they’ve organised buying campaigns over social media to back some of the market's most shorted stocks and trigger short squeezes.

The unprecedented market activity of this year has not only established a new category of stocks, but essentially defined a new kind of trading strategy. When trading meme stocks, the decision to buy or sell is based not on a company’s performance but on the hype it receives on social media.

Meme stocks are characterized by high volatility and short-lived popularity, mainly fuelled by social media platforms. The focus is generally on heavily shorted stocks (stocks that short sellers bet on going down in price) that groups of retail investors decide to back in buying campaigns. Their goal is to force short sellers to close out their positions by buying shares of stock and thus pushing up the stock price. 

When a stock has a lot of short interest (investors take short positions to benefit from that company’s likely downturn), there is potential for a short squeeze. This happens when some sudden good news about the company's prospects or just momentum created on purpose by a group of investors (as in the case of meme stocks) reverses the trend of the stock price, which pushes short sellers to close their position. They do that by purchasing shares from the market, all rushing to buy at the same time to cut their losses as much as possible, which pushes the stock price even higher, which in turn attracts more buyers. 

The list of most popular meme stocks changes all the time, as some of the original ones fade and others emerge. The only core stocks, also considered to be the source of the meme stock movement, seem to be AMC Entertainment (AMC) & GameStop (GME). Other stocks rising to meme stock fame as of late are Torchlight (TRCH), Palantir (PLTR) and Clover (CLOV).

There are a few patterns to look for when trying to find the next big meme stocks. Meme stocks commonly share the fact that they are heavily shorted. Oftentimes, stocks are skewed towards shorting when the company is believed to have no positive financial future. It’s these stocks that hedge funds short as a near guarantee for positive returns, and so they are potential targets for retail investors to try to push into a short squeeze through buying campaigns. Check Saxo's meme stock watchlist.

It might be a good idea to follow a meme stock watchlist and keep an eye out for the top movers. When trading meme stocks, make sure you set both stop-loss and take-profit targets to minimize your risk in highly volatile market conditions. A stop-loss makes sure you don't lose more money than you are comfortable with, while a take-profit guarantees a certain percentage of return when the stock price hits your set target. 

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