When putting together an investment portfolio, you can use a few different trading strategies.
You can buy and hold for the long term or opt for a short-term strategy to make money quickly.
There are two different ways to approach day trading: volume and volatility.
With a volume strategy, you’ll look for stocks with a very high number of trades daily, which moves the price consistently.
Volatile stocks move relatively large amounts in a very short period of time so that they can generate significant returns very quickly.
Both strategies can be pretty lucrative if you time your purchases right.
You’ll need to screen for high-volume stocks that trade over 1 million daily shares.
You’ll also need to look for a stock’s beta number, which 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 excellent options for day traders.
We’ve rounded up some of the best day trading stocks for investors looking for quick returns.
Best Day Trading Stocks
Advanced Micro Devices Inc. (NASDAQ: AMD)
Advanced Micro Devices 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 2.03 over the last five years.
They also have a massive average volume of over 60 million.
This stock has been performing well all year and is enjoying a steady climb through 2021 thus far.
This means right now could be a good time for day traders to ride the growth.
Day traders interested in this stock will want to keep an eye on new electronics releases.
For instance, AMD’s chips are used in highly desirable newer products like the PlayStation 5 and top-of-the-line computers.
Etsy Inc. (NASDAQ: ETSY)
Etsy is an incredibly fast-growing online business that deals primarily in handmade designs.
Founded in 2005, the company has over 60 million products currently listed on their site.
This unique niche makes Etsy stand out among other online retailers.
The push toward online shopping during the 2020 pandemic gave the company a boost in share price and trade volume.
This momentum continues into the third quarter of 2021, with little sign of stopping.
Nearly two million shares of Etsy stock are traded each day, with a share price 83% higher than last year at this time.
Their average monthly beta sits at 1.60, catching the gaze of day traders.
This makes Etsy a stock well worth considering for day trading.
Disney (NYSE: DIS)
Disney is another excellent stock for day trading.
It has an average volume of well over 8 million and a beta of 1.20, which indicates above-average volatility.
While many companies struggled during the COVID-19 pandemic, Disney did 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 benefited greatly from the popularity of at-home entertainment.
Even now, these streaming services are more popular than ever.
Disney stock has leveled off some this year but still sees a lot of day-to-day volatility.
Twilio is a technology company founded in 2008 and based in the San Francisco area.
They specialize in enterprise-level cloud services, allowing phone and text communication through the web.
As this technology becomes more and more prevalent, Twilio will continue to gain interest from investors.
Currently, their stock is up an impressive 45% from last year at this time.
They are seeing all-time high earnings and are looking to continue this forward momentum.
Their average trading volume sits at 1.5 million shares per day and is only expected to grow.
Their monthly beta score of 1.46 shows good volatility for day trading.
Emerging tech such as Twilio’s communication services should always be on a day trader’s radar.
Best Stocks To Day Trade
Tesla (NYSE: TSLA)
Tesla is an electric vehicle stock that has become very popular for day trading.
It has an average monthly beta of 2.00 and a substantial average volume of over 20 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 continue to rise, seeing 80% growth over the last year.
Day traders have the potential to follow those gains.
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 provides digital streaming devices and hardware for TVs.
With Roku, viewers can access streaming platforms like Netflix, Disney+, Hulu, Amazon Prime, HBO Max, and much more.
It’s clear that streaming isn’t going away anytime soon.
Roku’s volatility and volume have both gone up this year, catching the attention of day traders.
The stock currently has an average beta of 1.76 and an average daily volume of 4.6 million shares per day.
Roku’s stock has increased dramatically over the last year, seeing an increase of over 100%.
This increase, along with volatility, makes it especially appealing to day traders.
Best Day Trading Stocks Under $5
Aegon N.V. ADR (NYSE: AEG)
Aegon N.V. ADR is a life insurance and asset management company headquartered in the Netherlands.
The company has been around since 1983, with nearly 40 years of experience.
Their primary focus is to provide U.S. investors with an easy way to access foreign companies for trading.
Aegon N.V. ADR is working hard to reduce costs by selling off some of its non-core businesses.
Moves like this attract the attention of investors who are looking for companies moving in the right direction.
As a result, the company has seen an 83% share price increase in the last year alone.
Their beta score sits at a volatile 1.47, and they see 2.5 million shares traded per day.
At less than $5 per share, Aegon N.V. ADR deserves the look of any day trader.
Best Penny Stocks For Day Trading
Naked Brand Group (NASDAQ: NAKD)
The Naked Brand Group is a small clothing manufacturer based out of New Zealand.
The company produces an assortment of swimwear and undergarments.
They have seen a recent surge in no small part to their growing popularity around the world.
This penny stock rarely sees a share price of over $1 but has grown almost 180% over the last year.
Their beta is currently 0.73, but what makes Naked Brand Group so interesting is that their average trade volume sits at over 36 million shares per day.
Their stock has clearly caught the attention of many day traders, and you should consider adding this one to your list as well.
Should You Day Trade Stocks?
If you’ve already mastered the basics of investing, day trading can be an excellent 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 imperative 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.
One of the best ways to find new day trading stocks is through a stock screener.
This tool allows you to search for stocks by volume, volatility, current price, and more.
Since the market changes so much each day, screeners effectively find newly volatile stocks or those with a meaningful increase in volume.
Day traders should also keep an eye on the news every day, as 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.
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.
Best Day Trading Stocks: Final Thoughts
Day trading isn’t for everyone, but it can be an effective way to generate strong returns for investors who are willing to take a risk.
The best day trading stocks are ones that see significant price movements as the day goes on.
Sarah Foley is a freelance content writer based in Chicago. She covers finance as well as real estate, technology, pop culture, and more.
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