When putting together an investment portfolio, there are a few different trading strategies you can use. You can buy and hold for the long term, or you can opt for a short term strategy to make money quickly. We’ve rounded up some of the best day trading stocks for investors looking for quick returns.
There are two different ways to approach day trading: volume and volatility. With a volume strategy, you’ll look for stocks that see a very high number of trades each day, which moves the price consistently. Volatile stocks move relatively large amounts in a very short period of time, so they can generate significant returns very quickly.
Both strategies can be quite lucrative if you time your purchases right. You’ll need to screen for high volume stocks that trade over 1 million shares a day. You’ll also need to look for a stock’s beta number.
The beta indicates if a stock is more or less volatile than the broader market. If you find a stock with a beta that’s more than 1 or less than -1, that means it’s more volatile than the S&P500. These stocks can be very good options for day traders.
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Best Day Trading Stocks
Advanced Micro Devices Inc. (NASDAQ: AMD)
There’s been a lot of hype around Advanced Micro Devices this year. This company makes computer processors and other electronic parts.
Over the past several years, demand for computers, smartphones, and other electronics has been increasing. The COVID-19 pandemic exacerbated that demand, as people needed their computers for work, socialization, and entertainment.
AMD stock has the two key hallmarks of a good day trading stock. First, they are consistently volatile, with an average monthly beta of 2.18 over the last five years. They also have a massive average volume of over 43 million.
This stock has been performing well all year, but recently dipped slightly. This means right now could be a good time for day traders to take advantage of a slightly lower stock price.
Day traders interested in this stock will want to keep an eye on new electronics releases. AMD’s chips are used in highly desirable products like the PlayStation 5. As demand increases for these consoles, we are likely to see AMD stock go up.
Disney (NYSE: DIS)
Disney is another excellent stock for day trading. It has an average volume of 11.6 million, as well as a beta of 1.21, which indicates above-average volatility.
While many companies struggled during the COVID-19 pandemic, Disney has actually done very well. Although they had to close their theme parks, they were able to make up the financial losses with the success of their streaming service, Disney+.
Disney+ launched in November 2019, and they already have over 100 million subscribers. Disney also owns Hulu and ESPN’s streaming services, so they really benefited from the popularity of at-home entertainment.
Another reason why day traders should be so excited about this stock is theme park reopenings. California recently announced they were loosening restrictions and would allow Disneyland to reopen at the beginning of April.
Announcements like this can cause some volatility on the market. Day traders should keep an eye out for more reopening news for Disney’s other parks.
MGM (NYSE: MGM)
When you think about successful stocks right now, casino operators probably aren’t the first thing that comes to mind. After all, casinos had to shut down entirely for months in 2020. The casinos that are open now have to operate at a reduced capacity.
However, MGM Resorts stock is actually on the rise. They’re best known for their resorts in Las Vegas, although they do own casinos in other parts of the US and in Asia.
There are two main reasons why traders have been interested in MGM stock. The first is positive news about the COVID-19 pandemic. Many cities are slowly loosening restrictions on casinos. The vaccine rollout also means that more people will be able to travel and visit casinos safely.
On top of that, MGM has pivoted to the burgeoning sports betting market to stay afloat this year. They launched the BetMGM app, where customers can participate in sports betting online. Many states are legalizing sports betting, which means we’re likely to see this sector continue to grow.
Any day trader will be excited about MGM’s beta of 2.49, which means their average volatility is high enough for short-term trading. They also have a good average volume of 9.7.
Volkswagen (OTC: VWAGY)
Volkswagen isn’t typically a stock you would use for day trading. However, recent market activity has made this stock one to keep your eye on.
Over the course of just a week in March 2021, Volkswagen stock jumped from roughly $28 per share to $42 per share. There’s been a little bit of pullback since this spike happened, but we can expect to see some continued volatility for the next few weeks as a result of the hype.
The hype around Volkswagen stock is due to their commitment to electric vehicles. They recently released a new electric SUV, and they’re committed to delivering more than 450,000 electric vehicles in 2021.
That’s more than double the number of electric vehicles the brand sold in 2020. They also have a very ambitious goal of selling 3 million electric vehicles per year by 2025.
Demand for electric vehicles is already very high and is expected to increase in the future. Day traders should keep their eye on this stock over the next few weeks during this high volatility period.
Best Stocks To Day Trade
Tesla (NYSE: TSLA)
Tesla is another electric vehicle stock that has become very popular for day trading. It has an average monthly beta of 2.06 and a huge average volume of over 39 million shares per day.
This stock is particularly popular among traders who use the volume strategy, although it is relatively volatile as well. Tesla founder and CEO Elon Musk is in the news frequently for his controversial Tweets, which have contributed to the volatility of this stock over the past few years.
It’s not just Musk’s behavior driving this growth – it’s also Tesla’s electric cars, which are some of the most popular on the market. Tesla shares went up dramatically in price over the last year, peaking in early 2021.
However, share prices have since dropped off slightly. Investors seem concerned that Tesla won’t be able to maintain their momentum. While this might be concerning for long-term investors, it prevents a good opportunity for day trading.
Investors who want to day trade Tesla should keep a close eye on its price movements, as well as any news from the company and Musk himself. This stock is hugely popular among retail investors, and often moves based on the general sentiment of the market.
Roku (NASDAQ: ROKU)
Roku is a stock that has done very well during the pandemic. The company makes digital streaming devices for TVs. With Roku, viewers can access streaming platforms like Netflix, Disney+, Hulu, Amazon Prime, HBO Max, and much more.
Roku’s volatility and volume have both gone up this year, catching the attention of day traders. It’s clear that streaming isn’t going away anytime soon.
The stock currently has an average beta of 1.89 as well as an average daily volume of 4.6 million shares per day.
Roku is down slightly from its peak in February, but there’s still plenty of opportunity here for day trading. The company’s most recent earnings report dramatically exceeded expectations, and analysts’ expectations for the year ahead are strong.
Best Day Trading Stocks Under $5
Moxian Inc. (NASDAQ: MOXC)
Moxian is a Chinese technology company that helps small businesses take their operations online. They run a social networking and digital advertising platform in China.
This stock caught the eye of investors as shares increased dramatically over the last few weeks. There doesn’t seem to be any specific news driving the growth. However, several other small Chinese stocks saw sharp growth over the last few days as well.
This bodes well for traders using a volatility investing strategy right now. The stock currently has an average monthly beta of 3. Their volume also skyrocketed, trading over 53.8 million shares on March 18th.
Day traders should definitely keep their eye on this one over the next few weeks to see how things play out. While smaller stocks like this do come with their own risks, they also have huge potential for those who play their cards right.
Best Penny Stocks For Day Trading
Luokung Technology Corp. (NASDAQ: LKCO)
This Chinese stock has had an exciting few days on the market, making it one of the best penny stocks for day traders to watch.
Luokung is a tech company that focuses on digital maps. Their technology has potential applications for autonomous vehicles and smart cities, both of which are very exciting to investors.
Their stock price has been relatively volatile over the past few weeks because they announced an acquisition of eMapGo Technologies. eMapGo already provides in-car navigation services for other brands.
With so much hype around the autonomous vehicle market right now, it’s no surprise that this stock’s price has been up and down recently.
Penny stocks can be difficult to trade, because their volume is often very low. However, this stock has an average volume of 19 million shares per day. With a beta of 0.79, they aren’t particularly volatile, but the activity of the past few days still makes them a good stock for day trading right now.
Should You Day Trade Stocks?
If you’ve already mastered the basics of investing, day trading can be a good way to make money quickly. Day trading is something that anyone can learn how to do with practice and research.
Before you start day trading, it’s very important to make sure you have a good understanding of how the stock market works. Any day trading strategy comes with inherent risk, so it’s not the best tactic for beginners.
To day trade successfully, you’ll need to have time to watch the markets throughout the day. Webull and other trading apps have features like watchlists and price alerts. These tools can help you buy and sell at precisely the right time.
One of the best ways to find new day trading stocks is through a stock screener. These tools allow you to search for stocks by volume, volatility, current price, and more. Since the market changes so much each day, this is an effective way to find newly volatile stocks, or stocks with a meaningful increase in volume.
Day traders should also keep an eye on the news every day. Earnings reports and other announcements can move shares very quickly. Staying ahead of the curve on the news can help you find trading opportunities quickly, while they’re still at a relatively low price.
Tools like Trade Ideas are another great way to find day trading stocks. Trade Ideas is an innovative software program that uses AI technology to help you find exciting stock picks without the hassle.
Finally, day traders need to be aware of the additional costs that come with this trading strategy. Capital gains are taxed more heavily on stocks that you’ve held for a year or less, as opposed to stocks that you hold for the long term.
Day trading can also come with high commission fees on some platforms. However, apps like Webull have made it more affordable to day trade, as they don’t charge any commission fees.
Best Day Trading Stocks: Final Thoughts
Day trading isn’t for everyone, but for investors who are willing to take a risk, it can be an effective way to generate strong returns. The best day trading stocks are ones that see significant price movements as the day goes on.