Most Volatile Stocks

Chris Davis

Contributor, Benzinga

June 25, 2020

If you want to know where money is flowing in the stock market, you must become a master of volatility. Informed investors can use volatility to make money whether a stock goes up or down, and sophisticated investors always understand how volatility affects a portfolio.

Get started with our list of the best volatile stocks.

Highlighted Volatile Stocks:

Overview: Volatile Stocks

The coronavirus pandemic created a level of unprecedented volatility in the stock market. At the beginning of the pandemic, stock market circuit breakers were triggered 4 times between March 9 and March 18, 2020. Circuit breakers halt all trading if an index falls by 7%. The last time they were triggered at all was in 1997. 

The Dow Jones Industrial Average also suffered a single day record 1,031-point loss on February 25 — a record it broke the very next day with a 1,100 point loss. Unlucky stocks such as Exxon (NYSE: XOM) also triggered individual circuit breakers for themselves with huge selloffs.

Attribution: Wikimedia

The VIX, an index that measures market volatility based on option premium pricing, shot up to record levels. The closing level on the VIX reached 82.69 on March 16, 2020, breaking the record of 80.74 set on November, 21, 2008. To give context, the VIX usually falls in a range between 18 and 35. It’s known as the “fear gauge” and spikes during times of crisis.

Consumer activity usually falls in volatile market corrections, and the pandemic response was no different. Unemployment levels rose to 13.0% from 3.8% in 4 months with 14 million people suffering loss of employment. 

Price volatility historically produces a more emotionally-driven market and larger dissociations between stock price and company value. Companies with cash flow shortfalls may not be able to survive a severe impact, especially the retail companies most severely affected by drops in consumer spending. Brands like JCPenney (OTC: JCP), Hertz (NYSE: HTZ) and Chesapeake Energy (NYSE: CHK) all filed for bankruptcy within weeks of each other. Surprisingly, all 3 stock prices received huge boosts despite the news — with Chesapeake briefly spiking to $77.50 on June 8.

Some analysts make a living trying to explain volatility and its effect on the market. For example, JPMorgan Chase tried to quantify the effects of President Donald Trump’s tweets on the market. But no one has a simple answer about how to use volatility to trade successfully. Savvy investors understand the different ways to measure volatility and which philosophy to apply to a market scenario.

Best Online Brokers for Volatile Stocks

Succeeding in a wild market means good execution. Your execution depends largely on the broker you choose. Here is a list of the best online brokers for volatile stocks.

If you want to specialize in volatile stocks under $5, you may need to consider a broker that specializes in penny stocks. Not all brokers provide access to over-the-counter (OTC) markets and pink sheets.

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Commissions

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Get started securely through Webull’s website

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1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For

• Active traders
• Intermediate traders
• Advanced traders

Pros

• Commission-free trading in over 5,000 different stocks and ETFs
• No account maintenance fees or software platform fees
• No charges to open and maintain an account
• Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
• Intuitive trading platform with technical and fundamental analysis tools

Cons

• Does not support trading in options, mutual funds, bonds or OTC stocks

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Get started securely through TradeStation’s website

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1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For

• Advanced traders
• Options and futures traders
• Active stock traders

Pros

• Comprehensive trading platform and professional-grade tools
• Wide range of tradable securities
• Fully-operational mobile app

Cons

• Confusing pricing structure to leave new traders with a weak understanding of what they pay
• Cluttered layout to make navigating TradeStation’s platform more difficult than it should be

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Commissions

$0 $6.95 for OTC Stocks

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Get started securely through TD Ameritrade’s website

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Commissions

$0 $6.95 for OTC Stocks

Account Minimum

$0

1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For

• Novice investors
• Retirement savers
• Day traders

Pros

• World-class trading platforms
• Detailed research reports and Education Center
• Assets ranging from stocks and ETFs to derivatives like futures and options

Cons

• Thinkorswim can be overwhelming to inexperienced traders
• Derivatives trading more costly than some competitors
• Expensive margin rates

Features to Look for in Volatile Stocks

1. Put-call ratio. You can tell how the market expects a stock to move through the number of puts versus the number of calls on a particular date. A larger proportion of calls to puts means a bullish sentiment and vice versa.
2. Most active by share volume. Huge spikes in the number of people buying or selling a stock may point to a trend you can take advantage of.
3. Most advanced or declined. Many people like to look for stocks that went up or down by the highest percentages on the day. Ideally, individual volatilities will revert to the market mean for the day, giving an investor the chance to profit from a turnaround.

Volatile Stocks to Watch Out for This Year

Here are a few of the best volatile stocks to watch out for this year.

Attribution: Needpix

Simon Property Group (NYSE: SPG)

The Simon Property Group is the largest mall operator in the U.S. and the largest real estate investment trust (REIT). Commercial and residential real estate is in an uncomfortable limbo because of the coronavirus, and the SPG ticker reflects it. 

Simon’s stock lost around 66% of its value when COVID hit, and it has been fluctuating between the low 40s and mid 90s since then. The real estate sector faces additional pressure from the work-at-home industry with stocks like Zoom (NASDAQ: ZM) hitting new all-time highs.

Urban One (NASDAQ: UONE), (NASDAQ: UONEK)

Protests and civil unrest throughout the U.S. flow into the business community. Investors are voting with their money, and 1 of the beneficiaries of high interest in social relations is Urban One. 

The entertainment conglomerate focuses its content on Black Americans. Its stock flew from a $1 to $2 penny stock to a $54 high with daily swings of 100% up or down, give or take a few percent.

The company has 2 different classes of shares. UONE are the class A shares and UONEK are the class D shares. The only real difference between the 2 is voting rights.

Ideaya Biosciences Inc. (NASDAQ: IDYA)

The biotech industry was ground zero for market shocks in early 2020. Traders yanked their money in and out of the market on news of vaccine trials and COVID-19 casualty reports. Ideaya Biosciences has been 1 of the more volatile participants in the melee. 

Before the coronavirus, IDYA was just another one of the biotech stocks under $10 with relatively uninteresting news based swings. Investors doubled its price in 1 week based on an oncology partnership with GlaxoSmithKline.

Exxon Mobil (NYSE: XOM)

Forcible quarantine during the pandemic caused society to use a lot less energy. Investors realized this and punished the entire energy industry, most notably Exxon. 

The company hadn’t exactly been on the public’s good side anyway, so it’s only saving grace was its consistently positive earnings per share reports. The stock still plummeted by more than 50% from its 52 week highs and has been shuffling between the low 30s and mid 40s.

Carver Bancorp Inc. (NASDAQ: CARV)

The banking industry took a hit during COVID, and Carver couldn’t avoid the shrapnel. It was in penny stock range before the crisis and lost half of its value once COVID hit. 

Investors found it and boosted it 10 times from June 8 to June 15 based on adjustments the company made for its clients during the pandemic. As it stands, Carver may be 1 of the most underrated bank stocks under $20.

Most Volatile Movers of the Day

Take a look at these high flyers, big losers and premarket movers to see where the market’s money is going.

Uncertain Markets, Certain Profits

Volatility must be welcomed at a time like this. And although fundamentals seem unimportant in a volatile time, this may be exactly the time to trust them.

Someone will take home profits from every market, no matter how volatile. Patience, study and more patience will make you more likely to be a winner.