How to Research Volatile Stocks

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How to Research Volatile Stocks

Volatility is a broad notion with several criteria, mathematical models, computations, and ideas used to quantify and analyze volatility. Different traders may have different selection criteria for volatile equities. Here are a few examples:

  • For others, volatile stocks are simply those with the greatest disparity between the day’s high and low prices.
  • Others may see them as the most active stocks with the largest volume.
  • For the others, they may be those filtered using mathematical models and complicated computations based on historical data, for example.

Traders must define and choose their own definition of “volatility,” and then devise a strategy for monitoring those equities. Fortunately, excellent software, tools, and apps are available to help you with this.

key takeaways

  • There are several useful solutions available to assist traders monitor market volatility (however they define it), as well as individual volatile equities.
  • The official stock market website, which is available for free, is a fantastic place to start.
  • There are other free third-party applications that show market data, such as Yahoo Finance and Google Finance.
  • For the maximum in investment range, customisation, and real-time information, more expert traders and investors may pick a premium tool or platform.

Defining Volatility

Volatility-based trades are classified into two types:

  • Currently volatile: a stock with large fluctuations in price.
  • Predicted to be volatile: a stock that is now steady but is expected to break out with considerable volatility in the near future.

We’ll concentrate on the first stream since the second is more reliant on future expectations than on present activities, and may be affected by projected earnings reports, the result of a significant project that the firm may have bid on, and so on.

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Volatility Criteria

The majority of trading centered on volatile equities is geared toward rapid gratification. Simple volatility criterion might be:

  • Most Active by Share Volume
  • Most Advanced
  • Most Declined
  • Most Active by Dollar Volume
  • Furthermore, measures in the relevant derivatives market (open interest, volume, put-call ratio, implied volatility, and so on) may be used to gauge volatility in the underlying stock.

How to Track Volatility

It is advisable to go straight to the official stock market website, which is free. Typically, exchanges throughout the world have a real-time live-updating dedicated area for the aforementioned criteria.

NASDAQ Most Active Stocks Section:

NSE India Live Market Report Section:

Free Tools for Tracking Volatile Stocks

Aside from exchange-based live data, there are a variety of available programs (including browser-based interfaces and mobile apps) that may be used to pick or specify specific criteria for a rapid display of highly volatile stocks. Here is a sample list:

  • StockTA: The “Advanced Stock Screener” part of StockTA provides a strong combination of technical indicators, including volatility indicators for US and Canadian stocks.
  • StockFetcher: This website provides a customized tool in which users may essentially create (define) their own criteria to screen stocks that meet a certain pattern. Here’s an example of locating volatile stocks using a basic query:

  • FreeStockCharts: This website provides charts, widgets, and other associated information for a variety of technical indicators.
  • Yahoo Financial and Google Finance: Yahoo and Google, two internet behemoths, provide specialized finance sites for rapid access to market data and chosen technical indicators. Stock Screener (Google screenshot) is a feature that allows you to pick and select from the available criteria.
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  • ChartOasis: Provides downloadable technical analysis software as well as market data files to construct the necessary analysis, breakout patterns, and other indicators, including volatility-based indicators. It may also be used to backtest any trading strategy using historical data.

Free tools have their challenges. Among them:

  • Not everything is free. Basic quotations and charts are usually free with further paying services (with or without subscription period).
  • Free material may not always be accessible in real time, but may be delayed by a few minutes to a day.
  • Free tools may not cover all markets and locations of interest.
  • Limitations in accessible criteria and functionalities, when user-desired capability may not be fully available.
  • No options for customizing

Paid Tools for Tracking Volatile Stocks

The aforementioned limits may compel aggressive traders to seek out paid solutions; alternatively, specialized software packages from large market data players may be purchased at a premium price. Here are a few such examples:

These specialized items may be expensive and typically need long-term subscriptions. Please confirm that the provided functionality meets your needs before signing up. Your best chance is to get a trial version and properly evaluate it throughout the evaluation time.

Building Your Own Tracking Tool

Active traders might experiment with creating their own fast app, software, or interface to get their desired volatility stock screeners. Although it may need much research and trial and error, a tailored tool or platform may go a long way toward easing many duties for traders. Typical actions include utilizing programs (such as Perl scrappers) to harvest real-time live data from exchange websites or market data portals, parsing it in the program according to the necessary criteria, and screening stocks.

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The Bottom Line

Tools, software, programs, and websites serve as excellent sources of material in a variety of formats (data, charts, indicators, patterns, etc.).Using volatility-based parameters for day trading may result in successful chances if the defined criteria are properly understood and the relevant instruments are chosen to be applied with the appropriate accuracy.

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