How not to get burned, according to professionals

Wall Street has been shaken in the last week by amateur traders who pumped money into disadvantaged stocks in an attack on short positions held by large hedge funds.

Video game retailer Bricks-and-Mortar GameStop and the AMC movie chain have now grown by more than 1.744% and 838%, respectively, so far, after retail investors organized through stockpiled Reddit WallStreetBets. trying to raise prices. larger and squeeze institutional short sellers. Short selling is when investors borrow shares at a certain price, expecting the market value to fall below that level when it is time to pay for shares.

Hedge funds have already lost serious money and been forced to close short positions as online activists continue to look for new targets, despite warnings that the David versus Goliath trend could end in tears for some retail investors. On Thursday, Redditors was driving a tax on the shares of Nokia and others.

Now, analysts have told CNBC their strategies to keep investors safe as the battle between retail investors and institutional money heats up.