Gamestop Stock Price (GME)

The Tradu GameStop stock trading guide

Understand this large-cap stock and how you can use it to support your trading strategy.

What are GameStop stocks?

GameStop Corp stocks (GME) are available for public trade on the NYSE and the company is also listed on the S&P 400. GME's origins go back to 1984 when Texas software company Babbage's was formed. Its current name was established in 1999 and GameStop Corp was incorporated in 2021, finally going public with an IPO in February 2022.

Its headquarters are in Grapevine, Texas, with operations in over 4000 locations. GameStop is the largest global video game retailer with stores in the US, Canada, Europe and Australia. Products include video games, consoles, hardware and accessories as well as electronics, toys and games.

Due to the company's diverse consumer technological offerings, GameStop stocks remain popular with traders.

How have GameStop stocks performed historically?

The company enjoyed strong growth and performance during the early days (specifically between 2005 and 2015) as it made several acquisitions. However, a lack of sales beginning around 2017 resulted in store closures, redundancies and changes within its board of directors.

After four years of relatively poor performance, GameStop shares saw an all-time high of 86.88 USD in early 2021, due to a short squeeze. However, larger losses since then have seen the stock price drop considerably, with the current value (as of August 2023) fluctuating between 17 and 22 USD. GameStop's 2022 annual report highlighted a number of strategic risks, including failure to maintain strong retail and e-commerce experiences for customers, failure to keep up with technology and changing customer preferences, profitability and senior management changes.

However, as a result of its current low value, GameStop stocks are a popular asset for traders.

Factors affecting the price of GameStop stocks

A variety of factors can affect the GameStop share price. Anything that influences supply and demand is likely to result in price movements.

• Company announcements: A big influence on the GameStop stock price has been company news and earnings reports. With many staff changes at the director level and reports of lower profits and cutbacks, GameStop stocks have suffered considerably due to poor investor sentiment.
• Economy: Wider economic factors have an effect on company stocks, especially those relating to inflation. Higher costs of living can have negative impacts on the retail industry as consumers generally spend less on non-essential items and limit their spending.
• Consumer preferences: Due to the nature of GameStop's products, a key factor for the company is keeping up with consumer preferences. Gaming technology has advanced rapidly in recent years, seeing a huge shift to online platforms. Therefore, the demand for GameStop's physical, in-store products has suffered a decrease.
• World events: Like many retail-store companies, GameStop was affected by the Covid-19 pandemic. While online sales continued and grew, its retail revenue suffered. GameStop stocks are influenced by a range of world events and crises, many of which are unpredictable.

Trading GameStop stocks

GameStop stock can be traded via two main methods, both of which are classed as financial derivatives.

CFDs: Contracts for difference (CFDs) involve buying or selling a contract in relation to your predicted market direction. Your profit or loss will be based on the difference between the opening and closing trades.

With these trading methods, you don’t own the underlying asset. This means you can trade in GameStop regardless of the market direction as you're speculating on the price movement.

Leverage can be used to open your position when trading with CFDs. You can maximise your capital by placing a smaller deposit, increasing profit opportunities. However, it's crucial to be aware that leverage can also amplify any losses.

GameStop investing: If trading GameStop stock CFDs isn't for you, you might want to consider investing. This option allows you to buy shares and fully own the underlying asset. Often used as a long-term opportunity to make a profit, investing in GameStop can mean you're less at risk from short-term market volatility.

However, there are also downsides. You can't speculate on the price in either market direction as you can with financial derivatives and, although investing might limit the risk of sudden, short-term fluctuations, there is still the possibility of making a loss if GameStop suffers poor performance.

Benefits of trading GameStop stocks

• Trade both market directions: With CFDs there is the opportunity to make a profit regardless of the market conditions. Trade bull and bear markets by speculating on the price movement without owning the actual asset.
• Liquid stock: With high-volume GameStop stock, there are numerous opportunities to place trades, whatever your risk tolerance.
• Access to a popular market: Consumer electronics is a popular market among traders with demand still rising. Trading GameStop stock provides exposure to a large gaming retailer, listed on the NYSE.
• Leverage: It's possible to open a larger position with a smaller deposit by using leverage, maximising your capital. Do bear in mind, however, that this can also leave you at risk of greater loss.

Downsides of trading GameStop stocks

• Market limitations: Trading the stock of just one company can limit your market exposure and profit opportunity. Traders often choose a variety of markets and industries to increase their portfolio and reduce risk.
• Market fluctuations: As we've seen, GameStop is not immune from significant fluctuations and volatility, due to a variety of factors. Many influences can affect the GameStop stock price and it's not always possible to correctly predict the market direction. This can result in losses, regardless of robust fundamental and technical analysis.
• Leverage risk: While leverage can increase any profit, it can also result in magnified losses should the trade fail to go in your favour.

How to trade GameStop stocks with Tradu

1. Open an account: Start trading as soon as you open a Tradu account online.
2. Create your trading plan: Decide on your trading goals, level of risk tolerance, preferred markets and capital.
3. Research GameStop stock performance: Take a look at the current and historical GameStop stock price on our live chart and implement technical indicators.
4. Open your position: Place your trade using CFDs and execute risk management tools to limit losses.
5. Utilise our insights: Browse our range of resources and increase your trading opportunities.
6. Diversify: Trade a variety of other markets including CFDs on indices, forex and commodities.