How to research volatile stocks

Volatility is a broad term because there are different standards, mathematical models, calculations and concepts that can be used to measure and evaluate volatility. Different traders may have their own standards for volatile stocks. A few examples:

  • For some people, volatile stocks may just be the stocks with the biggest difference between the highest and lowest prices of the day.
  • For others, they may be the most active stocks with the highest volume.
  • The rest may be selected based on mathematical models and complex calculations considering historical data.

The trader needs to determine and finalize his own definition of “volatility”, and then find a way to focus on such stocks. Fortunately, excellent software, tools, and applications are available to do this for you.

Key points

  • There are many good options to help traders track volatility in the market (regardless of how they define it), as well as individual volatile stocks.
  • The free official website of the stock exchange is a good starting point.
  • There are also some free third-party applications, such as Yahoo Finance and Google Finance, that can display market data.
  • More sophisticated traders and investors may prefer paid tools or platforms to get the ultimate investment scope, customization, and real-time information.

Define volatility

Trading based on volatility can be divided into two categories:

  • Current volatility: stocks currently showing high volatility
  • Expected volatility: stocks that are currently stable but are expected to break through with high volatility in the near future

We will focus on the first stream because the second stream relies more on future expectations than current actions, and may still rely on expected earnings reports, the results of large-scale projects that the company may bid on, etc.

Volatility Standard

Most trades based on volatility stocks are designed to take immediate action. Simple volatility criteria might include:

  • Number of most active stocks
  • The most advanced
  • Most rejected
  • The most active USD trading volume
  • In addition, the parameters of the corresponding derivatives market (open interest, trading volume, put option ratio, implied volatility, etc.) can also be used to evaluate the volatility of the underlying stock.

How to track volatility

It is best to go directly to the official website of the exchange, which is free. Usually, exchanges around the world maintain a dedicated section for the above standards that is updated in real time.

The most active stocks of NASDAQ:

NSE India real-time market report section:

Free tool to track volatile stocks

In addition to exchange-based real-time data, people can also view various available applications (including browser-based interfaces and mobile applications), using these defined criteria can be selected or set to quickly view highly volatile stocks. This is an indicative list:

  • StockTA: The “Advanced Stock Screener” section of StockTA provides a good combination of technical indicators, including indicators of US and Canadian stock volatility.
  • StockFetcher: This site provides a customizable tool in which people can write (set) their own criteria to screen stocks that match the desired pattern. The following is an example of obtaining volatile stocks through a simple query:
  • FreeStockCharts: This site provides charts, widgets and related information for many technical indicators
  • Yahoo Finance and Google Finance: Both Internet giants, Yahoo and Google, have dedicated financial portals that provide quick access to market data and selected technical indicators. Available features include Stock Screener (screen shots from Google), from which you can pick the available standards.
  • ChartOasis: Provides downloadable technical analysis software and market data files to generate required analysis, breakthrough patterns and other indicators, including volatility-based indicators.It can also be used to backtest any trading strategy based on historical data

Free tools have their challenges. in:

  • Not everything may be free. Generally, basic quotes and charts may provide other advanced features for free (with/without trial period)
  • Available free content may not always be real-time, but will be delayed from a few minutes to a day
  • Free tools may not cover all desired markets and regions
  • Due to the limitations of available standards and functions, the functions required by the user may not be fully usable
  • No customization options

Paid tool to track volatile stocks

The above restrictions may force active traders to look for paid tools, or people can buy special software products at high prices from big market data participants. Here are some examples:

The cost of these specialized products can be medium to high, and they usually require long-term subscriptions. Before registering, please make sure that the available features meet your requirements. The best way is to use the trial version and thoroughly test it during the evaluation period.

Build your own tracking tool

Active traders can explore and build their own quick applications, programs or interfaces to get the volatility stock screeners they want. Although it may require a lot of research to set up and a lot of trial and error, a customized tool or platform can do a lot and provide traders with a lot of convenience. Commonly used activities include using programs (such as Perl scrapers) to extract real-time real-time data from exchange websites or market data portals, and to further analyze them in the program according to required standards and obtain the required stock screening.

Bottom line

Tools, software, programs, and websites are good sources of content in multiple forms (data, charts, indicators, patterns, etc.). The use of volatility-based parameters for day trading can generate profit opportunities, provided that a clear understanding of the set standards and selection of the correct tools are used with the correct precision.


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