How to Buy Rocket Companies (RKT) Stock

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Contributor, Benzinga
May 12, 2021

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Rocket Companies Inc. (NYSE: RKT), the parent company of Quicken Loans LLC, is a Detroit-based mortgage lending company. Rocket Companies was founded in 1985 by Detroit native Dan Gilbert, who is also the majority owner of the Cleveland Cavaliers. RKT went public last August and is now one of the hottest stocks on Wall Street.

Thinking about investing in Rocket Companies? Learn how to buy shares in this hot stock today.

How to Buy Rocket Companies (RKT) Stock Summary:

Rocket Companies (NYSE: RKT) is listed on the New York Stock Exchange (NYSE), so you can buy shares the same way as for any other publicly listed company. There are 3 main steps to buying a stock, and each requires you to consider various factors.

  • Choose a brokerage: The first step to becoming an owner of Rocket Companies is to open up a brokerage account. In order to determine the best broker for you, think about your personal investing goals and how a brokerage can help you meet those.
  • Deposit funds: Before you can buy shares, you need to deposit funds to trade with. Link your bank account with your brokerage account and decide how much money you can afford to invest.
  • Search for RKT and hit buy: Rocket Companies is listed on the NYSE, so it is a commonly-traded stock. Simply search for the RKT ticker symbol, and submit a buy order for your desired amount of shares.

How to Buy Rocket Companies (RKT) Stock

Rocket Companies Inc. (NYSE: RKT) stock has been on fire recently. Since reporting earnings in February 2021, the stock has nearly doubled. The company blew away the EPS estimate by 30% and now seems to have attracted the attention of r/wallstreetbets. With a nearly 40% short float, the stock could be poised for further gains.

While Rocket Companies has seen a surge of investor interest lately, it still presents some added risk. The stock has gone from $20 to $40 in under 2 weeks, so only invest money into RKT that you can afford to lose. Furthermore, since stocks that r/wallstreetbets tend to be extremely volatile, be sure to use limit and stop-loss orders when trading RKT.

Step-by-Step Guide

  1. Pick a brokerage.

    The first thing you need to do before becoming a RKT shareholder is to open up a brokerage account. Most brokers have done away with commissions for trades, so should be able to buy shares of RKT with no added fees.

    There are countless brokers to choose from, so be sure to define your own trading goals to help narrow down your options. If you think you may need some practice before using real money, make sure to choose a brokerage that offers paper trading.

    Prior settling on a brokerage firm, take into account any promotional offers. By doing this you may end up with bonus funds to trade with or even free stocks.

  2. Decide how many shares you want.

    Next, you need to decide how many shares of RKT to purchase. Some things to consider here include your account balance and investing time horizon. Regardless of how much money you have in your account, don’t invest more than a few percent into a single company.

    Part of what goes into determining how many shares to buy is the amount of money you are willing to lose. Settle on a max-loss figure and consider setting stop-loss orders to protect you in case of a rapid decline. Once you decide how many shares of RKT you want to buy, start looking for a favorable entry point.

  3. Choose your order type.

    After determining how much capital to invest in Rocket Companies, you need to decide the type of order you will use to purchase shares. There are numerous order types to choose from, with each one offering various advantages and disadvantages.

    A limit order tells your broker to only fill the order once the stock reaches your set price-point. On the other hand, a market order will execute almost immediately at the National Best Bid and Offer (NBBO) price.

    Rocket Companies Inc. (RKT) share price has been extremely volatile as of late, so consider using a limit order to better control your risk. If you use a market order, you may find yourself immediately down on the position due to price slippage.

  4. Execute your trade. 

    Now that you have selected an order type, simply press buy to purchase your shares of RKT. This will communicate your order to you broker, who then routes through a market maker. After your order gets filled, you will see shares of RKT appear in your account.

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Rocket Companies Inc. Stock History

Rocket Companies Inc. is the parent company of Quicken Loans, which was founded in 1985 under the name Rock Financial. In the late 1990s, Quicken Loans became one of the first mortgage lenders to focus its efforts online. This led to rapid growth, and it wasn't significantly interrupted by the 2008 financial crisis. 

By 2015, Quicken Loans had formed Rocket Mortgage, which began to offer electronic-closings in every state. Quicken Loans is now the largest retail lender in the United States, both online and overall. The company filed paperwork to go public in July 2020 and adopted the name Rocket Companies Inc. On its August 6 IPO date, Rocket Companies raised $1.8 billion, with the stock price rising nearly 20%.

Now r/wallstreetbets has taken notice of its nearly 40% short-interest. The company also reported blow out earnings on February 25, beating EPS estimates by 30%. The company also announced a special dividend of $1.11 per share, with the ex-dividend date set for March 8. All of these factors have contributed to the stock increasing by nearly 100% in the past week.

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Benzinga Pro on 3/3/2021

Pros to Buying Rocket Companies Inc. Stock

Rocket Companies Inc. (RKT) has been one of the hottest stocks as of late. Watch for the stock to take advantage of:

  • Good financials: Rocket Companies Inc. had a very strong earnings report on February 25. The company clocked in a $1.12 EPS, far surpassing the $0.86 estimate. In addition, the company announced a partnership with Morgan Stanley and declared a special $1.11 per share dividend. If these strong trends continue, the price of RKT could continue to increase.
  • The return of r/wallstreetbets: Mentions of RKT have been up as of late on the popular reddit page r/wallstreetbets. The company also has nearly a 40% short-interest. After last month’s massive short squeezes in Gamestop (NYSE: GME), AMC (NYSE: AMC) and other r/wallstreetbets favorites, Rocket Companies (NYSE: GME) could be poised for even more gains. 

Cons to Buying Rocket Companies Inc. Stock

Any stock that is up nearly 100% in a week presents added risk. Some potential downsides to owning shares of Rocket Companies Inc. (NYSE: RKT) include:

  • A market correction: The stock market has gone nearly straight up since the COVID-19 crash a year ago. If some event were to cause a market correction, Rocket Companies Inc. (NYSE) could fall even more considering its recent gains.
  • The loss of r/wallstreetbets: While the influence of r/wallstreetbets has proven to be an incredible short-term catalyst, these short-squeeze stocks tend to fall back down to earth eventually. Even though Rocket Companies Inc. (NYSE: RKT) has a much stronger underlying business than most other reddit stocks, now that reddit is a factor the stock could always see rapid declines.

Ready to Rocket?

Rocket Companies had an incredible start to March, rising nearly 100% after strong earnings and the influence of r/wallstreetbets. While this growth could continue, the share price of Rocket Companies Inc. (NYSE: RKT) is likely to be extremely volatile over the next few weeks.

As a result, it is crucial to effectively manage your risk if buying into a riskier stock such as RKT. Some brokers are better than others when it comes to trading volatile stocks, so it is crucial to choose one of the best online stock brokers if you're ready to rocket today.