Which stocks are the most volatile?
The stock market is an unpredictable arena in which to make a return on an investment. Even the safe and secure "blue chip" stocks got hit badly by the sinking unemployment numbers and the recession. In the world where unpredictability is the norm there are some stocks that are said to be the most volatile.
The term "penny stock" is applied to any company who's trading value is less than £3 dollars per share or has market capitalisations under £65 million according to stock market website The Motley Fool. These stocks are exceptionally volatile for investors because the stock is able to be purchased cheaply in large volumes thus making any swing in one direction or the other a major win or a catastrophic loss. Penny stocks are also subject to sharp short-term gains, making them attractive for investors only looking to make a quick buck. The Ford Motor Company, Sun Microsystems and Sprint have all been considered penny stocks at varying points.
Technology, pharmaceutical science and Internet-based companies are among the most volatile in the market because these companies live and die on research reports and the very tangible success or failure of product lines. As of 2010, pharmaceutical development company Human Genome Sciences ranked as the number one most volatile stock according to the Motley Fool's 1-year price change index. The stock displayed a one year price change of more than 763 per cent.
Airlines have taken a beating in the stock market due to the recession and periods of rising gas prices. Market forecast and analysis website Seeking Alpha rated Mesa Air Group, the company that owns US Airways and United Express, as the stock with the largest intraday spread at over 17 per cent.