Volatility considerations are separate from price considerations. A $20 stock with a $2 average daily range and a $40 stock with a $2 average daily range have the same profile from an absolute volatility perspective, even though one shows twice the relative volatility of the other. Even from an overnight perspective, a higher priced stock is not necessarily more likely to gap down than a lower priced one, so there is no real reason to watch price differential there either. This is why looking at volatility is so key. Different stocks have differenct general activity levels and the activity level matters far more than the price. Only when you get to extreme outliers do the effects of price and volatility percentage begin to skew statistical expectations. The concept of basing risk on buying power is antiquated. This is one example where the futures markets clearly have it right- basing margin requirements on underlying volatility rather than on the dollar value of the contract, which is, for all intensive purposes, meaningless in terms of true risk for short term traders.
intel misses....sigh...so much for earnings catching up...but then again, I've been told the same sector won't lead twice in a row... Donuts! Krispy Kreme! They're on a roll D ).
the more short term pain the better imho every pollyanna that gets killed increases the odds for a sustainable rally after this move grounds out, rather than another round of pop n' slop
but COF beats by a mile...I guess the consumer with his credit card holds the key... when we start seeing the bad news shrugged off... RFMD beat, btw, coming in at +.01 instead of a loss. But then again, who knows how these numbers are figured.
If then, two traders are risking the same percent risk on the stocks they are trading, how is it that "the person trading the higher priced stock will enjoy the greater dollar profit" ?
five percent of a big number is bigger than five percent of a small number but percentage risk in account terms, percentage risk in stock price terms, and percentage risk in volatility terms are three separate issues- apples, oranges and coconuts and now would be a good time for me to voluntarily shut up