Week of 06/03-06/07 GameStop Rally Short Lived, Nvidia Tops $3 Trillion Market Cap

Another volatile week in the stock market as Nvidia stock surged past a $3 trillion market cap for the first time. NVDA now has a 52-week high of $1,255.87 per share and its scheduled for a 10-to-1 split at the market close this Friday. This strategic move aims to make stock ownership of the chip giant more accessible for investors who have been sitting in the sidelines. GameStop stock rallied again in premarket trading early Monday, surging over 90% after ‘Roaring Kitty’ posted his account showing a 5 million share position worth $115.7 million as of Friday's closing price. The post also showed a position of 120,000 call options with a strike price of $20 that expire on June 21st that were purchased for about $5.68 each. The stock continued to surge throughout the week with prices reaching over $64 per share on Thursday on news of the Roaring Kitty scheduling a livestream on Friday through the YouTube platform. This did not end up well on Friday, as GME stock plunged over 40%, causing other meme stocks such as AMC to drop.

The pros and cons of trading meme stocks

Pros:

High Potential for Profit: Meme stocks are highly volatile and can experience exponential price surges, providing traders with high potential for profit in a short period.

Engaging Trading Community: Meme stocks are usually popular among traders and social media users, creating an engaging and supportive trading community.

Cons:

High Risk: Meme stocks are susceptible to unpredictable price swings, making them a high-risk investment, requiring significant investment knowledge and experience to navigate successfully.

Short-term Fluctuations: Meme stocks typically experience short-term price fluctuations that are difficult to predict, making them susceptible to sudden price drops and crashes, leading to significant losses for traders.

It's important to note that meme stocks may not be suitable for every trader or investor, and it's essential to consider individual financial goals, risk tolerance, and investment strategies before trading them.