Investing

Have you bulked up on small-cap stocks? Then learn how to think like a volatility trader.

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Have you bulked up on small-cap stocks? Then learn how to think like a volatility trader.
Have you bulked up on small-cap stocks? Then learn how to think like a volatility trader.

Synopsis

Small-cap stocks are highly volatile. So, it is important to book profits if you are trading in them. But typically, investors take a long-term bet which is more driven by momentum than fundamentals.

What do you see when you scan through top small-cap stocks that have given the best returns in the last one year? Extremely high volatility. So, should you sell your holding? Well, these stocks have low profitability ratios but weak fundamentals with hardly any institutional holding. In most cases, these businesses are not scalable. These stocks often go up very fast but also experience sudden falls. So, you should book profit as soon as that
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The Economic Times