Common sense tells you hedge funds will not bother with low float stocks with a few million shares. Why would they bother with stocks they would have problems getting in and out off if they have to? That is not counting skyrocketing the price when they get in or cratering the price when they try to get out? Low float stocks are traded by the legions of day traders trying to make a quick buck.
Great topic, in daytrading since "99 I've found that best daytrading stocks & ETFs: + are ones like AMD TWTR JD NUGT UVXY etc in the $20 - $60 range + have minimum 1-3 point atrs/ranges + have at least 15k/minute volume + best pattern is small gaps up that continue Small cap low float < $10 stocks are for morons, amateurs and gamblers. There's been a recent infestation of young phony wannabe educators this last 5 years who destroy traders accounts hawking chatrooms promoting cheap stock daytrading. I get emailed horror stories from traders who fall prey to the cheap stock frontrun rooms. Red flags: - they make phony performance claims, saying they regularly have big multi thousand dollar days - nobody can mirror their trades - very active on social, YouTube Instagram because they're mainly marketers - claims of turning small accounts into huge ones - act friendly and hyper responsive to dms, classic long con approach If it sounds too good to be true it is. Clever frontrunning cons that will be taken down via ftc/sec eventually. Small cap low float under $10 stocks are avoided by pros because of risk of circuit breaker halts, low liquidity, smaller ranges, tough to trade consistently, pop & drop risk etc. Daytrading stocks under $10 is much riskier and is foolish imho. Based on 21 years experience, lessons learned.
Bro, for institutional traders, "stocks" are just a small piece of the puzzle. They work massive trades in the Fixed Income markets: Treasuries, MBS, Credit, etc. The amounts of money can be mind-boggling for the average Joe. For example, a typical trade might be a Repurchase Agreement (repo trade) of $2B (USD 2000000000) in US Treasury notes, with a haircut of 1%, or 20M. With this $2B in hand they will buy more on-the-run Treasury bonds, market and sell them to China, Israel, and other high-wealth individuals. Profit from these sales will finance the repo buyback, including haircut, commission, and fees. Mid-cap stocks are small potatoes, even bread crumbs. Maintaining software for these trades was a wake-up call. Sometimes I would look at some of these numbers, squint, rub my eyes, and think, "Is this a bug? How many zeroes are on that number? Shit, I hope we're using a data type that supports these large numbers... and no rounding error."
You %%. You said something aboutt a J... green flying machine eh?? LOL/true. IF 80% or 95% of an elephant herd avoids small caps-- there must be a good reason for that. Having said that, IBD founder made his fortune in small caps+ NOT so liquid stuff. [H e avoids stocks under $5] True, he was very, very good, NYSE seat, IBD newspaper, WON+ CO, founding mutual funds, selling mutual funds, red white + blue barcharts…………………………………………………………………….. [Personal; I study elephant/bear + turtle patterns..... more than whales]
Great input! But don't you think there would be much less competition in the small cap space since smart money doesn't mess it it?
%% !] NO, never met him 2] I have his newspapers from-- 2008-2019, with 50dma /200dma...………………………………... 3] And his books , so I proved his stuff true 4]I don't think he runs the IBD empire anymore-just a guess 5] He said ' I don't know why people use ETFs- I can make more money with stocks'' I do, because if one can average loosing less with ETFs, may make more. 7] His net worth is not as much as Mayor Mike Bloomberg