The GameStop Shares are being traded at a much higher price and listed as one of the most successful stocks in 2020. If you are willing to buy or sell GameStop shares but lack knowledge about it then you are at the very right place as in this guide we will discuss whether the stocks are good for you, what are the best trading platforms that you can use to buy GameStop shares in a risk-free manner and we will also discuss on how you can buy these amazing Shares. So, without further ado let’s get straight into our topic.
GameStop is one of the largest retailers of online video gaming in the US and globally with a market capitalization of $22.67B. It operates in over 5,000 retail stores in more than 100 international countries including the US, Newzealand, Canada, Europe and Australia.
GameStop Shares- An overview
GameStop is one of the largest game retailers in the US. The company before 2020 wasn’t doing any good but is now at present making headlines globally. The year 2021, has been an amazing year for the GameStop shares and is now marked among a few retailers that have outperformed in the market recently.
Since the beginning of the year 2021, the company’s YTD stands at 1600% despite the fact that it is under a financial crisis. All this happened because a group of Reddit traders sparked a ‘short squeeze’. It is a phenomenon in the stock market that is used when a stock is heavily shorted and then experiences a sudden rapid increase in its price and the stock due to the high number of sellers that must buy stocks at some point.
However, this stock is at that point where predicting anything is way too hard, it is yet unknown whether the shares will continue to grow or face a sudden fall.
Covid-19 Impact on GameStop Shares
The deadly corona pandemic has badly crushed the stock market, however, GameStop shares are among those few shares that have got the positive push from the pandemic. GameStop’s last market close was $184.52, which is around 97.81 per cent up on its crash value of $4.04 and 5,693.59 per cent up on the lowest point reached during the crash of March 2020, when its shares fell as low as $3.1849.
That means, if you had bought $1,000 worth of its shares at the beginning of February 2020, then at the bottom of the crash of March the shares would have been $964.54, and if you held on to them, then they had been worth $46,713.08 as of the last market close.
Things to consider before buying GameStop Shares
Before you buy shares of any company, it is very crucial to do some background research and determine whether you should add that particular shares to your portfolio or not. When buying shares of any company there are a variety of things that you should consider such as how it has performed in the past, what are the future expectations, what have it paid to its shareholders and many more. Therefore it is very important to do your research before jumping straight to any decision.
Keep in mind that GameStop shares are at a very risky stage, predicting anything for its future is nearly impossible at the moment. However, there sure are a few reasons that will compel you to invest in GameStop. Below we have listed a few points that you should consider before jumping on buying GameStop Shares.
- GameStop now is among the largest consumer electronics and gaming merchandise retailers. It has been in the online industry for almost four decades now. There are rumours that GameStop is headed for bankruptcy in the year 2020 and as of September 2020, it has already closed 388 stores. Since the very beginning of 2021, GameStop’s share price increased in value by more than 1600 per cent from $17.25 to $325 per share.
- Another important thing to consider while trading GameStop shares is that it was paying a steady annual dividend between 2012 to 2019. However, for the next twelve months, it won’t pay any dividends due to their intentions to re-allocate the capital to reduce debt and provide flexibility.
- At present deciding whether it is a good time to buy GameStop shares or not can be very challenging. However, there still are some reasons that will make you trade GameStop shares right now, one such reason is to “follow the trend”. From this, we mean that at present several groups of individual traders have decided to promote a variety of stocks including GameStop. Well, it doesn’t mean that it doesn’t involve risk, every investment involves risk to some extent. Investing in the highly volatile stocks are considered as high risk investments as the price of these stocks are uneven.
- Another reason to consider buying GameStop shares is that the PlayStation 5 by Sony and the Xbox series by Microsoft have recently launched at the end of 2020. The company then announced that despite the challenges caused by the pandemic it is ready to launch the next-generation console. That clearly means that GameStop shares will surge in sales in the short term.
- Another major reason that makes GameStop shares look promising is its competition with Amazon. The entrepreneur Ryan Cohen who has recently acquired 10 per cent of GameStop’s total shares said the company could compete with Amazon by offering a wide range of products and merchandise on its website and ship it to the customers in the same way as Amazon does.
Best Trading platforms for trading GameStop Shares
In the financial market, there are thousands of trading platforms available that allow you to buy a variety of trading assets, including GameStop Shares. But you cannot trust a platform on the basis of the fact that it gives you access to the asset you are willing to purchase. Before you select any trading platform, there are a variety of metrics that you should consider, such as regulations, payment methods, trading assets, deposits and withdrawals and many more.
But looking for all the metrics in all the trading platforms can be very hectic and time-consuming. Therefore to save you your time and energy we have listed the best trading platforms that allow you to buy GameStop shares. All the platforms that we have mentioned below are regulated by regulatory bodies, hence can be trusted blindly.
eToro- Overall best trading platform for GameStop Shares
The very best trading platform which gives you access to GameStop shares is eToro. Other than this it gives you access to a variety of trading assets from stock, ETFs, CFDs and cryptocurrencies. The platform is easy to navigate even by the new traders. It is the most favourite trading platform of UK Investors because it provides you with a variety of trading features. This platform allows you to trade stocks that are listed on the London, New York and Tokyo exchanges. On this platform you are allowed to apply the leverage of up to 1:5 and even you can buy assets traditionally.
The platform is further regulated by the FCA, ASIC and CySEC. Even the platform is accessible to US traders as it is also registered with FINRA. Except you will be required to pay a 0.5% fee on all your deposits and $5 on every withdrawal. It is the cheapest brokerage platform in the UK.
For beginners, eToro provides the copy trading feature. This feature allows you to copy ongoing trades of expert traders. You can also use the copy portfolio feature, which allows you to diversify your investment portfolio. Unlike other platforms, account creation on this platform is not time-consuming. It takes only a few minutes to create an account on eToro.
Once you are done with creating an account you are then required to fund it to start your trading journey. For the convenience of its user’s, it accepts various payment methods for making a deposit such as Debit/Credit Card, Bank account, e-wallet e.t.c. The fee attached to the platform is an inactivity fee of $5, which is understandable and also the spreads are relatively low. The platform also offers a mobile application for the convenience of its customers. This trading platform also offers 24/7 available customer support which other free platforms don’t offer.
- Regulated by FCA, ASIC and CySEC.
- Copy-trading and CopyPortfolio feature.
- Offers a variety of financial assets.
- Accepts debit/credit, bank account, e-wallet.
- Fractional trading Offers 800+ shares, including GameStop Shares.
IG- Best trading platform for diversification
Another amazing platform we have on our list is IG. This trading platform was launched in 1974 and since then it is known as the most popular trading platform for CFD trading. This platform gives you access to the GameStop shares as well as to other trading assets to diversify your trading platform.
It is regulated by FCA, which means you don’t have to worry about the safety and security of your funds. The platform gives you access to over 12,000 assets and allows you to apply the leverage of up to 1:200 on forex pairs like EUR/USD, EUR/GBP, EUR/GBP, EUR/JPY, and USD/JPY. That means with an account balance of just $300, you could potentially trade with $60,000. What attracts the traders most to this platform is that it gives access to over 80 currency pairs.
The account creation on this trading platform is also super easy. However, you do need to pay an entry-level fee of £8. But the good thing is that if you trade regularly then this entry-level fee will be reduced to £3. Once created an account you will be required to make a minimum deposit of $250 on this platform to initiate trading. This minimum deposit isn’t the fee of this platform but the working capital that is needed by the investors to start investing journey.
- Well reputed UK Broker
- Offers more than 12,000 traditional assets
- Offers leverage and short selling
- Offers spread betting and CFD products
- Offers educational tools
- Offers more than 80 pairs
- MT4 is supported
- $15 Commission on US stocks
- $250 minimum deposit amount
FinecoBank- Trusted broker for GameStop Shares
The last trading platform that we have on our list is Fineco Bank. This amazing Platform is packed with all the amazing Platforms that make it a favourite among trades. This online broker is FCA regulated and is partnered with FSCS to safeguard the funds of its investors. It is backed by an Italian bank that has been active since 1999. This platform gives you access to various asset classes, thousands of international stocks, dozens of exchanges and markets including GameStop Shares.
Though the platform doesn’t allow you to purchase shares Commission free, this platform is one of the cheapest GameStop trading platforms that allow you to pay just £2.95 per trade with a small annual platform fee of 0.25%. The only drawback to FinecoBank is that it doesn’t support cryptocurrencies or Copy Trading tools.
It offers low investments and requires a small fee. This small fee applies to each global exchange you invest in. The minimum deposit amount on FinecoBank is £100. Since it offers you to go both long or short on your selected GameStop Shares, as well as offers you to apply the leverage of up to 1:5 if you are a UK retailer, the platform is a must to go with.
- Regulated by the FCA
- Allow access to thousands of UK and international shares
- Allow depositing with UK bank account
- Offers great research and educational department
- Charges a small amount, £2.95 per trade when buying and selling shares.
- Offers a variety of stocks, including GameStop.
- Charges 0.25% annual fee
- Doesn’t accept debit/ Credit cards for Withdrawals and deposits.
How to buy GameStop Shares through a trading platform?
There are thousands of trading platforms from where you can buy GameStopbut here we are taking eToro as an example to make you understand the whole Procedure of buying GameStopthrough a trading platform. Following is a step by step guide to help you understand the whole procedure in a super easy manner.
Step 1: Create an Account
The very first step to buying GameStopis to create an account on the official website of eToro. To do so you are required to fill in a registration form by entering in your basic details such as your name, phone number, e-mail address, and setting a strong password. After entering all of your details make sure to accept terms and conditions.
eToro will ask you to verify your identity by uploading some of your documents, don’t worry as your documents are truly safe on this platform. However, you don’t need to undergo verification until you deposit more than $2,250 or you request a withdrawal.
Step2: Fund your Trading Account
Now that you have successfully registered on this platform you are now all set to fund your account by making a minimum deposit of £160. This funding amount isn’t the fee of the robot but the working capital that is needed by the traders to execute trades. eToro offers several payment methods for the convenience of its traders, you can choose whatever method you feel more comfortable with. The payment methods supported by eToro are Debit/Credit Card, PayPal, Skrill, Nettler, and Bank Transfer.
Step 3: Make your Purchase
Now that you have successfully registered and funded your trading account, you are now all set to buy GameStop Shares. To do so, all you are required to do is to enter ‘GameStop’ into the search engine at the top of the page and once entered click on the result that appears in front of you. Then click on the ‘Trade Button’, enter your desired amount and then click finally on ‘Open Trade’ to buy your GameStop Shares. On this platform, you can buy or sell GameStop shares as long as your transaction involves a minimum of £40. You also have the privilege to apply Leverage and you can also set a stop loss or take profit level for your trade using the order form.
GameStop shares – Buy or Sell?
Whether you decide to keep or sell the share, the very first thing you should do is to ensure whether the company and the share have the potential to perform well in future or not. One important thing to keep in mind while deciding is that the company GameStop has been on a long decline before the pandemic because of its outdated business model. However, since the beginning of the year 2021 its share prices have exploded. And, at present GameStop shares are currently speculative hence are ideal for active day traders.
Regardless of how disappointing GameStop has been in the past and there are higher chances of game retailers disappearing in the future, the GameStop shares may still be positive in the short term because of the Reddit Ponzi scheme. In the coming future, GameStop shares are likely to fall to the pre-GameStop Saga, however, there are chances that it could rise even higher before finding its real valuation.
That means, whether you decide to buy or sell, the chances of rising and falling are equal, so while trading GameStop Shares, it’s highly advised to stay updated with the latest news and alerts about GameStop.
Selling GameStop shares
If you don’t believe in the future of GameStop Shares and are willing to sell the shares, you should consider short-selling the stock. In order to short sell, you first need to borrow capital from your chosen broker and then sell the shares and then buy them back at a lower price.
However, at present finding, a suitable broker for short selling can be highly challenging due to the high volatility and the restrictions enforced by the regulators. For example, one of the largest brokers Robinhood has announced that it will automatically close the position of the client if found at risk of not having collateral.
From all the depth in research, we have concluded that GameStop shares are ideal for day traders due to the fact that Reddit investors took on Wall Street hedge funds. At present GameStop, shares are very challenging yet interesting for the fact that they can either be bought for trading or can be short-sell. That’s why you must choose a platform that offers both options on your plate.
One such example is eToro, the platform is highly regulated and allows you to buy and as well as short sell GameStop Shares via CFD. Furthermore, the platform doesn’t charge any fee or commission and offers a few amazing trading features including a demo account feature so that its clients can experience trading before investing in their real money. The demo account feature is pre-loaded with $100,000 virtual money.
- What is GameStop?
GameStop is one of the largest retailers of online video gaming in the US and globally.
- When did GameStop go public?
The company GameStop went public in February 2002 at a price of $18 per share. And, then in December 2007, it reached its all-time high of $63.30.
- Does GameStop Pay dividends?
For now, GameStop does not pay dividends at all due to its idea of reallocating the capital. However, the company was a favourite among investors for paying handsome dividends between 2012 to 2019.
- What is the minimum amount of GameStop shares I can buy?
Well, this totally depends on the broker you chose for trading. A majority of brokerage platforms maintain a minimum amount of investment however if you choose to buy GameStop shares via a CFD platform like eToro you will be allowed for fractional ownership that means instead of buying a share as a whole you can buy a part of it. That means, on the trading platform you can buy a part of GameStop Shares for as low as $50.
- Which is the best broker for trading GameStocks Shares?
All the above-mentioned brokers are the top-rated in the market. However, if we have to choose the one among the listed ones, then we would recommend you to choose eToro as the platform allows you to buy shares via CFD without paying any commission and it also allows you to do fractional trading.