High-volatile stocks are stocks that exhibit significant fluctuations in their price over a short period of time. High volatile stocks continue to be in demand among investors willing to take high risks in the hope of fast growth. In the stock market, some stocks show more fluctuations than the overall market. In India stockbrokers and investors keep an eye out for these highly volatile stocks as they can lead to significant returns, with their notable price changes. Let's read further about the best high volatile stocks in India.
What is the Meaning of Volatility in the Stock Market?
Volatility is the rate at which a security's price increases or decreases for a set of returns, indicating the risk associated with the price change. It is measured by calculating the standard deviation of annualised returns over a given period. It gauges the speed of securities or market indexes' value. High standard deviation values indicate a wide spectrum of prices, while low values indicate a narrow range. In the stock market, rapid price fluctuation is considered volatility, with a high standard deviation value indicating a dynamic price rise or fall. A surge or dive of 1% in market indexes typically classifies it as a "volatile" market.
Disclaimer: The information provided on the above stocks is for informational purposes only. It is crucial to conduct thorough research before making any investment decisions regarding these stocks. We do not recommend trading any stocks without comprehensive research and professional financial advice. Always consult with a certified financial advisor to ensure informed and appropriate investment choices.
How to Identify Best Volatile Stocks?
Identifying highly volatile stocks on the NSE requires a systematic approach incorporating measures like Beta to gauge volatility. The Nifty High Beta 50 index tracks the most volatile Indian stocks and compares them with the benchmark index. High-volatility stocks have higher chances of intraday returns due to fast price fluctuations. Beta can be measured by comparing it to the benchmark index. A Beta greater than 1 indicates high volatility, while a Beta equal to 1 indicates equal performance. A beta of less than 1 indicates less fluctuation than the benchmark index.
Why do People Invest in High Volatile Stocks?
There are several main reasons why investors become attracted to volatile stocks. The potential returns on these stocks are far higher than those of steady, blue-chip companies. Investors can try to "buy low and sell high" during market fluctuations if they are creative with their timing and have an in-depth understanding of the company's prospects.
Some investors view highly volatile stocks as a way to add diversity to their portfolios by adding a level of risk that could eventually lead to higher returns..
How to Invest in Most Volatile Stocks in India?
Analysing India's most volatile stocks today requires a calculated approach to balance possible rewards and risks properly. Consider these important steps:
Who Should Invest in High Volatile Stocks?
High volatile penny stocks can offer substantial gains, but they also come with significant risks that require careful research and risk management strategies. Investing for the long term reduces the effect of volatility on portfolio performance. Risk-averse investors may be unsettled by volatile markets, but such swings have less impact on long-term investments. So, Long-Term investors can consider investing in high-volatility stocks.
Factors to Consider Before Investing in High Volatile Stocks in India?
High profits may be possible from investing in extremely volatile stocks, but there is a higher risk involved. It is, therefore, important to carefully evaluate a few criteria before investing in
highly volatile stocks. Factors to consider before investing in highly volatile stocks are given as follows:
Features of the Most Volatile Stocks to Invest in India
Before investing in highly volatile stocks in India in 2024, investors should understand the following distinctive features.
What are the Advantages & Disadvantages of Volatile Stocks?
Here are the advantages and disadvantages of fluctuating stocks:
Advantages of Volatile Stocks
Disadvantages of Volatile Stocks
In the long run, highly volatile stocks can have a large profit potential. This can be attributed to their frequently lower prices than stocks with lower volatility.
Furthermore, riskier than less volatile stocks are high volatility stocks. This is because there is a greater potential for significant losses due to their pricing' erratic fluctuations.
Traders can profit from small price fluctuations by quickly buying and selling highly volatile stocks.
It might be challenging to predict the short-term performance of volatile stocks. Making profits and managing your trades can be challenging as a result.
High volatility stocks can provide investors with entry into unestablished new industries.
Stocks with high volatility may not be as liquid as stocks with lower volatility. As a result, it could be challenging to acquire and sell them rapidly, which could make it difficult to sell a position if the stock price drops.
Tips For Investors While Investing in High Volatile Stocks
Various tips for investors while investing in high volatile stocks are explained as follows.
Being invested and tolerating short-term fluctuations is one tactic used by investors when dealing with highly volatile stocks. Implementing this into practice can be more difficult than it seems because, in a bear market, a person's portfolio could decline 50% or more.
Additionally, traders have to eliminate the rumours around the buy-and-hold approach. A long-term investor must understand how corporate fundamentals drive the markets to make profitable investments.
While trading online, it is possible to experience problems accessing your account; therefore, you should consider using other methods, including faxing or calling your broker.
When markets aren't moving as expected or in the way that they usually do, investors should exercise caution when placing their orders. This can minimise losses from inaccurate quotes.
Things to Consider Before Investing in High Volatile Stocks
Here are the main things to consider before investing in high volatile stocks.
Before investing in high-volatility companies, investors must know how to take advantage of volatility. Losses result from impulsive reactions to market downturns.
Avoiding losses usually takes preference over creating profits for investors. Over time, embracing volatility can result in significant gains, necessitating adhering to investing plans during bear markets.
Volatility can result in large losses for traders just interested in capital gains. Profiting from volatility requires efficient trade execution because abrupt changes in the market can swiftly drain investment funds for inexperienced and seasoned traders.
Conclusion Before investing in highly volatile stocks, thorough due diligence and technical analysis are essential. Short-term investments in these stocks are often susceptible to market shocks and unexpected developments. Those with a high-risk tolerance may find opportunities to profit quickly.
However, individuals concerned by sudden decreases in their investment value should avoid these stocks. Alternatively, if the fundamentals are good, one might consider maintaining a long-term investment in volatile stocks. Lastly, use a reliable stock market app to ease out your investment.
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The stock's price might be temporarily frozen if it reaches a certain limit to prevent excessively high prices.
Yes, but there might be limitations. When a stock's price jumps significantly, it often means there are more buyers than sellers.
Brokerage platforms, and real-time market trackers can show you stocks with significant price increases.
These stocks are suited for shorter-term investment strategies. Define your exit plan beforehand, based on a specific price target or timeframe.
Short-term capital gains taxes apply if you sell the stock within a year of purchase. Long-term capital gains tax rates are typically lower if you hold for over a year. Consult a tax advisor for specific tax advice.
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