Making Money with Stock Volatility

In simple terms, stock volatility is the range at which share price changes over a stipulated time period. With price stability, the volatility remains low, and vice versa. Most volatile stocks are known to hit their highs and then go down rather fast. These kinds of stocks have erratic nature and dramatic falls. There can be a rapid increase or decrease. Stock earnings have an impact on stock volatility.

Most risk-receptive traders make money in target-rich environments through the three main most volatile stock commodities. These include Bitcoin and crude oil because of their sensitive and ever-changing nature. Stock volatility can result due to certain factors, one of them being the stock earnings calendar. There are certain examples of this, such as no-sells- all buys. Apart from this, there can be other factors such s, company news, economic releases, analyst recommendation, unexpected stock earnings result, and popular IPO.

On the contrary, the least volatile stocks are the ones that do not change unless triggered. For example, gold has found a place in the least volatile commodities for a long time because its price remains mostly unchanged for a long time. However, certain conditions affect the gold price when it may plunge or rise phenomenally, thereby affecting volatility.

Now, if we specifically talk about day trading, one of the best stocks for day trading is that which has enough volume and offers great opportunities in price movements. The volume enables a trader to flow in or out of the opportunities easily. These factors can be referred to as volume and volatility. An investor can measure the most stock volatile not just based on stock earnings, but also on certain indicators, which form its key metrics.
These include Cboe Volatility Index (VIX), Bollinger Bands, and average true range (ATR). These are the best volatility indicators, even though there are a lot more.
Volatility is an indicator of dispersion of return in context with the market index or security. Higher volatility simply means riskier security. A perfect example of this is the rise and fall of the stock market over one percent over a certain period of time. If this happens, it is known as a volatile market.

With the onset of COVID-19, a lot of things changed in the world market. The economy dwindled across the globe, and share markets crashed considerably. However, some stocks performed really well, mostly including the ones with the healthcare sector and pharmaceutical, apart from daily essentials. Volatility is affected by such factors too.

A year ago, cyclical stocks were the most volatile stocks in the batch. These included the ones from sectors like energy, airlines, cruise lines, metal and mining, electric vehicle, leisure and entertainment, and more. Stock earnings of these sectors were affected negatively due to the pandemic and necessary lockdown scenarios across different countries.

At Stockearning, you can check the stocks with the highest volatility today, or the opposite too. You can get an idea about the top 10 low volatility stocks today. A lot of new investors are apprehensive about the most volatile stocks. Should we, or shouldn’t we, is on the top of their mind. In reality, the best about volatility is higher returns and also that it is measurable. With concrete parameters, you understand it and thus act on it strategically. Volatility is actually a good friend for those investing actively in stocks. Understanding the connection between stock earnings and volatility is just the tip of the iceberg. There is a range of mid-cap to high-cap stocks where you can invest and earn pretty well to build your corpus.