Low Float Stocks: What To Know And How To Trade Using Benzinga Pro

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What Are Low Float Stocks? Floating stock is coined as a company’s outstanding shares minus those restricted or held by insiders and major shareholders. Low float stock companies do not have many outstanding shares available to trade, which tends to make their stock more volatile due to the principles of supply and demand. Some companies will strategize around this philosophy and intentionally adopt the low float stock method to garner public interest.

Investors should note that because demand usually outweighs supply, news catalysts can significantly move prices up or down depending on the positivity or negativity of the catalyst.

Another important indicator to watch for is that ticker’s Relative Volume, or RVOL. This metric demonstrates how many traders are watching the ticker; higher RVOL numbers indicate that these tickers are being monitored more heavily in the current time period than before, which is typically a good signal for fast upwards movement.

It's important to remember that volatility works both ways, making low float stocks ideal for short-term trading.

Trading Low Float Stocks with Benzinga Pro: Benzinga Pro carries a powerful feature to allow traders to search and filter for desirable low float stocks to obtain shares before they move. Using the Screener tool, investors can track down low float stocks that they like to maximize returns.