So if you trade small-cap stocks, you need a solid approach for your risk management. Of course there are risks with these stocks.
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Get StocksToTrade + the Breaking News Chat add-on in a 14-day trial - it’s just $17. Two Wall Street pros scan the markets and news to find the catalysts that can supercharge stock runs. It has beautiful charts, built-in scanners - even for small-caps - and so much more! Get a 14-day trial for just $7 here.Īnd if you want to know how top traders get the news that can move stocks fast, check out the StocksToTrade Breaking News Chat add-on feature. This can leave traders to fill in the gaps.īut you can scan for these stocks and so much more with the StocksToTrade platform. Analysts and investors may not pay much attention to them. There’s not always a lot of readily available information on small-caps. This is a prime example of what many day traders look for in small-caps. It spiked in early March from the $5 area to almost $9 on a surge in volume, meaning this stock has a history of good price action and volatility. SLGG trades an average of more than 8 million shares a day - that’s a decent amount of trading volume. It’s currently trading in the $6s and $7s and has a market cap of over 150 million shares. Let’s look at SLGG, one of the companies listed above. That means more chances for price swings. More buyers mean higher trading volume - and higher trading volume means more volatility. The lower prices make them attractive to newer traders and those with small accounts. Trading small-cap stocks may be risky, but there are potential benefits. (NASDAQ: STAF) 6-month chart (Source: StocksToTrade) Potential Benefits of Trading Small-Cap Stocks With the right news, AEZS could run again… Keep an eye on this stock and watch for news catalysts. In February, it jumped from the 80-cent area to almost $4 in just a couple of days on new product news.īiotech companies in general are reaching new highs. (NASDAQ: AEZS)ĪEZS is a biotech stock with a history of running. Learn from these picks to better understand how you can find stocks to trade for your strategy. Use this list as your inspiration to build your own watchlist.
These picks are not in any way a recommendation to buy. I’ll get to the list, but first I have to say that this is a watchlist only. Let’s get to the meat of what you came for - top small-caps to watch in 2021. These stocks tend to be better for day trading. That means setting reasonable goals while setting levels for your risk. That’s OK - as long as you have a plan to trade them. Some of these companies won’t have the greatest financials or earning reports. What does their financial performance look like? Have there been any management changes? Do their press releases have real news, or are they just fluff? Do you see any red flags? Small-cap companies may have good growth potential … But because they can be risky, it’s important to find out as much as you can about them. But make sure you have a good trading plan with an entry/exit strategy - and stick to it. If you’re a high risk/high reward kind of trader, then trading small-cap stocks might be for you. Make sure a small-cap stock fits in with your trading goals, and that you understand the risk and have a solid trading plan. Trading small-cap stocks can be riskier than trading well-established stocks. That’s what makes them attractive to traders. That means trading them can be riskier.īut there’s also more growth potential and a greater chance for big moves.
These stocks usually have lower liquidity than larger-cap stocks. Small-cap stocks are mostly smaller, up-and-coming companies. It doesn’t matter what sector the company’s in. What Is Considered a Small-Cap Stock?Īny stock with a market cap of less than $2 billion could be considered a small-cap stock. It’s calculated by multiplying the share price by the number of shares. Market capitalization - market cap - is the value of a company’s outstanding shares. Every ToolĪ small-cap stock is a stock with a market capitalization between $100 million and $2 billion.