Retail Traders Only Trade Stocks In Play With High Relative Volume Stocks
Equities in Play, or high-relative volume stocks with fundamental catalysts that are being traded independent of the general market, are the only stocks that retail traders trade.
When it comes to loudness, we're not quite sure what we need. Only companies with an average daily volume of more than 500,000 shares are eligible for my trading considerations.
If you want to trade the stock without difficulties, you need a specific level of liquidity in the stock. There is no guarantee, however, that if you purchase a stock for $30, you can truly get out at a price of $29.85. Do you have to sell at $29.50 to get out of the market due to the low volume?
This is not a smart stock to trade intraday if you determine that you should leave at $29.85, but in reality you can only exit at $29.50. You won't have to worry about a nasty surprise when you're ready to get out of a stock in Play.
What are the characteristics of a stock that is considered a "Stock in Play"? Fundamental information regarding the stock is usually released the day before or on the same trading day. The value of a company may be significantly impacted by important news or events, and these occurrences can serve as fundamental catalysts for its price movement.
- The financial statements
- Pre-announcement of earnings warnings
- Surprises in earnings
- The FDA's approvals and denials.
- Big product launches and alliances/partnerships
- Wins/losses in major contracts
- Changes in organizational structure/layoffs/management
- Divestitures, repurchases, and debt offers
The balance sheet, income statement, and cash flow statement are all components of earnings reports. Combined, they give a comprehensive picture of the company's revenues, costs, net income, and profits per share (EPS).
When two businesses merge or acquire each other, they are referred to as mergers and acquisitions (M&A). Despite the fact that the terms "merger" and "acquisition" are sometimes used interchangeably, they have distinct legal connotations in the United States. When two firms of comparable size merge, the result is a new, larger company.
As opposed to this merger, an acquisition refers to the purchase of another firm by an already bigger corporation. If the target company's board does not approve the transaction, it might be either friendly or hostile.
Restructuring is the process of improving a company by altering its business model. Legal, operational, or ownership changes are all examples of these changes. An external or internal factor may be to blame for such a movement inside the firm.
All equities with a pre-market gain or loss of more than 2% are screened and added to our Gappers watchlist. For the most part, stocks that were in play the day before tend to remain in play for a few more days.
Specific day trading tactics, such as momentum, reversal, VWAP, and moving average, will be covered in subsequent articles. How can I discover the stock for each approach at this point in time? There are three types of equities that we provide to the general public for retail trading. This categorization is based on our own experiences, and it helps to clarify where to look for stocks and how to approach investing in them.