Other brokers took notice and it wasn’t long before commission-free trades was commonly available. When Robinhood first offered commission-free trading, millennials gravitated toward the platform. What if the price moves against you? With fractional shares, you can take a position in 1/10th of a share, reducing your risk and allowing you to diversify into other stocks. Using most of your buying power (the funds in your account) on one trade is risky. Be warned though, if using margin to buy shares and your portfolio value falls, you may be asked to deposit additional funds known as “maintenance margin.” Fractional share tradingīYND shares are expensive, and chances are you can only afford one or two shares with a minimum account deposit of $300.
Therefore, you could have $1,000 in your trading account and use it to buy $6,000 of BYND stock at a leverage ratio of 6:1. As a result, you don’t have to sit on your hands waiting for the clearinghouse to reinstate your buying power.Ī margin account lets you “leverage” up to three to six times your account balance on qualifying stocks. With margin trading, the broker “loans” you money to keep trading while your transactions clear. While the trades are clearing, you typically won’t be able to access your buying power. It takes 48 hours for trades to clear with your broker's clearinghouse. Margin and cash accountsĪ cash account only lets you trade the cash balance in your account. Brokers vary in their offerings, so it pays to shop around for the best deal. Then again, when it comes to retailers' short squeeze candidates, weak fundamentals matter little-and can actually be perceived as a positive.The first step in trading BYND is to open an account with a stock broker. Fleeting consumer demand and widening net losses highlight what is an ugly fundamental backdrop right now. Of the nine analysts that have offered updates on the stock this month, three have called it a sell and six a hold. The Street's opinion on Beyond Meat isn't quite as negative but it's certainly not bullish either. Over the last two months, the retailer has received a dozen sell ratings, a lone hold rating, and no buys. Last week, three firms downgraded the stock to sell with price targets in the $5 to $7.50 range. Lately, plunging sales and a CEO departure have been more reason for analysts' bearish sentiment. An opportunity for anti-establishment spite tends to attract more people to the party and accelerate a squeeze.īed Bath & Beyond has long been despised by the Street even before it was ordained a meme play. Often this is the reason why the stock is so heavily shorted in the first place. This matters because retail traders tend to rally behind a company that it knows the big professionals don't like. Pessimism amongst Wall Street research firms has been another key component of some of the biggest recent short squeezes. If a short attack can sustain momentum for a couple days, Beyond Meat could experience an epic weeklong squeeze. The calculation factors in the typical trading volume the stock sees, often an average of the last 30 or 90 days. This is the estimated number of days it would take short sellers to cover their positions by repurchasing borrowed shares. True to short squeeze form, the stock has since returned to where the social media fueled rally began.Īnother important metric to watch here is Beyond Meat's 6.4 short interest ratio. Earlier this month, Beyond Meat shot up above $40 following a disappointing second quarter report that included worker layoffs and lowered guidance. The struggling company has had some short squeeze flare ups of its own, but they've been relatively modest and underachievers.
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