The volatility of a penny stock depends on the fluctuation of price in the given timeframe. The volatility of the stocks may go up to several fluctuations during the day. The trends of volatility are much lower and don’t exceed their levels on the silent periods. The stocks under $1 have percentage-wise fluctuations to spot for the volatility of these penny stocks.
Volatility refers to the price range variation of any stock within a definite time frame, such as a day, weekly, monthly or a year. If the price of the stock is moving quickly, they are considered to be volatile. Volatility can move out in either direction (upwards or downwards) depending on the stock price variations. High-volatility penny stocks are low-priced stocks experiencing the significant price variations within short intervals.
For example, the cannabis stocks are in the tumbling market and the investors take an opportunity to lock the recent profits for their day-trading schedules. The present time has massive run in the valuations and we can’t determine if it could be paused anytime with the change in government policies which is now rare in chances. There have been surprisingly strong numbers and the profit-taking rates have drove with the increased enthusiasm in the market. People are crazy to see the next movements in the revenue growth in the penny marijuana stocks. There have been some positive movement in the recent times and with the upward movements. The chances of pullback are rare but could be there as per the volatility rate of penny stocks.
High-Volatility Penny Stocks
In finding out the high-volatility penny stocks, it is important to find out exactly what you’ve been looking for.
- Price movements: In penny stock movements, you’d seek out for the stocks having high spiking rate to gain profits. The stocks moving out quickly are the ones which you will look out for the potential success for your investments.
- Biggest gains and losses: The stocks having big gains and losses is a signal of high volatility. There could be a catalyst causing fluctuation in the prices.
- Activities: The stocks with no activity have no volatility. It clearly means that there are a fewer buyers and sellers of the stock. If you take the larger position, there would be a high disadvantage waiting for you for having unavailability to get lack of demand.
Benefits for trading volatile stocks
Volatile stocks are riskier than the slowly-moving stocks. It is not a turn-on for the day-traders or the penny stock investors. Risks come with rewards and it is true for the penny stocks. The volatility makes the stocks desirable for the people who look for day-trading rewards. The smaller accounts with high volatility rate have an opportunity to grow in their levels.
The people who are looking for profitable results within least possible time will embrace volatility in it. Trading is challenging and it doesn’t matter if the prices are going up or down, the strategies should be intelligent enough to get the most out of your investments.