Between June 18 and September 18, 2024, trends show that meme stocks have surged in popularity once again, with increased trading activity among retail traders, according to Capital.com data.

Notably, Trump Media & Technology Group Corp (DJT), primarily owned by former US president Donald Trump, has seen significant interest. It closed at $16.50, up 2.04% on October 7, with pre-market trading rising to $16.88, according to Nasdaq.

Blue-Chip Stocks Surpass Meme Stocks

Despite the renewed interest in stocks like GameStop and AMC, blue-chip stocks such as Tesla, Apple, and Coinbase have yielded better returns for traders over the last three months, especially when paired with stop-loss protection.

I went over to WallStreetBets on Reddit to see how they are reacting to Trump's Truth Social $DJT stock, since people are claiming that it's going to be the next "meme stock."

This is what I found.

1) They don't seem to be very big fans of the stock.
2) They think it will just… pic.twitter.com/rWg4lI9sUV

— Ed Krassenstein (@EdKrassen) March 27, 2024

The analysis, based on the trading activity of 33,500 global traders on Capital.com, reveals that while meme stocks remain in the spotlight, they have proven less profitable than established blue-chip companies.

Stop-Loss Usage Impacts Profits

GameStop (GME) ranked as the third most traded stock on the platform during the summer, following Tesla and Nvidia. AMC Entertainment Holdings Inc (AMC) also made it to the top 10 most traded stocks during this period.

However, the trading dynamics for these popular meme stocks indicate a cautionary tale. Less than half, 44% of all AMC trades were profitable, while GameStop saw a modest profit rate of 51% among Capital.com traders.

Furthermore, meme stocks exhibited the lowest adoption of stop-loss protection, with only 13% of AMC positions and 19% of GME positions utilizing this crucial risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term tool. Stop-loss orders are designed to limit losses or lock in profits by automatically closing trades when prices reach predetermined levels.

In contrast, traders who employed stop-loss orders and focused on blue-chip stocks experienced higher profitability. Tesla trades, for instance, boasted a 60% win rate, with 22% of those trades implementing stop-loss protection, making it the most profitable equity trade of the summer.