If you know how to play well in volatile marketand how to to make money from volatile stocks ,it can proove out to be very profitable for you . But if you do not know the trick ,then here is how you can too.
Make stock options your friend
If you are wanting to make money from a volatile stock then it is important to know a thing or two about stock options. While stock options are high risk and do expire, they can make you a fortune in just a small amount of time. If there is a stock that is on the move in different directions, research to see what the stocks next move will be. Then by a call (if the stock is bullish) or buy a put (if the stock is bearish). With a stock moving quickly it can turn a small investment into a large fortune.
A spread.
This is a tactic used in the stock options world. This is where you buy calls and puts. If you are not positive what the stock’s next move will be but you know it will be big, look into a spread. This way you are covered if the stock flies or plummets. When you have a spread it is just important for a stock to pick a direction and go. If the stock stays around the same price you can risk losing your investment.
Look at the stock’s chart.
This way you can see how volatile the stock is and if it has any kind of trend that can help you choose what direction it is moving. Sometimes figuring out what a volatile stock will do can be very difficult, but if you can get it right you can make a large amount of money. So study the stock, then find a good entry point, then purchase your stock option. The good thing about volatile stocks is that they keep moving. So you if you miss one entry point into buying a stock option, you will get another chance.