What is Penny Stock Volatility?

Those newer to any type of stock investing and trading usually have a core list of lingo that stumps them. And penny stocks trading is no different. Today’s question has to do with penny stock volatility. After answering the question, I’ll also present you with some other key stock terms to know.

Q: What is Penny Stock Volatility?

A:

Simply put, penny stock volatility describes the up and down activity of a stock (penny stocks in this case). While “investors” typically grow upset if their stock is too volatile, traders love it, because volatility means opportunity.

As a penny stocks trader, you want high volatility (stock price going up and down throughout the day) if you can get it. The last thing you want is a stock price that just sits there.

Hope that explains penny stock volatility a little more. And just in case you’re brand new to trading and investing in stocks, here are some other key stock terms you should know:

Liquidity: This is about the trading volume and how easily you can get in and out of the stock. You want to trade stocks with good liquidity.

Market Cap: The amount of shares issued multiplied by the stock price.

Shares Outstanding: Total number of shares a company has issue.

Float: The number of shares that the general public can trade.

Microcap (or Micro Cap): Companies with a market cap under $250 million.

Smallcap (or Small Cap) :Companies with a market cap from $250 million – $1 billion. See Small Cap Investing.