Many Small investors bet on risky stocks that may generate high returns in a few weeks. Meme Stocks are the new favorite of retail investors.
Meme Stocks
Meme Stocks are the stocks that have seen a sudden spike in trading volume led by the hype on social media platforms like Reddit or Twitter.
Volatile & Risky
These stocks are highly volatile and risky as prices show sudden spikes without any changes in the fundamentals of the company.
How Meme Stocks Work
Initially, Meme Stock Mania started with the stock Gamestop when it become popular on the Reddit forum “WallStreetBets” as investors start to bet on highly shorted stocks.
The meme stock investors wanted to make a profit on “Short Squeeze”
Short Squeeze
A short squeeze happens when short sellers are forced to buy back shorted shares due to a sudden spike in stock prices resulting in margin calls.