Two stocks with great trade setups hit my scanner recently…
Stock #1 had a hot press release, volume spiked, and ripped 200%* higher within minutes.
The other stock?
It was also tied to a huge catalyst. You would expect fireworks, right?
But no. The chart was beautiful but very different from Stock #1. Instead, it slowly ground up over 24 hours, delivering a nice profit but nothing like Stock #1’s.
If you’re looking for explosive moves like the first example, I’ve got just what you need…
Are you using my Monday Setup yet? If not, don’t wait any longer. You’re leaving money on the table!
Here’s how it works…
Every Monday, the market kicks back into gear after its weekend nap… and that reset creates a unique opportunity.
As the first session of the week gets started, there’s a specific pattern we look for that appears again and again with uncanny consistency.
And it has delivered some unbelievable gains!
Look at our huge winner from this past Monday…
AgriFORCE Growing Systems (NASDAQ: AGRI) surged 225%* after dropping news it would become the first Avalanche (a cryptocurrency) -focused company on NASDAQ.
These are the kinds of Monday morning spikes we hunt for every week.
Now it’s time to learn how to spot them for yourself!
Watch the video below for the full trade breakdown and strategy tutorial on my Monday Setup.
So why did one stock in the example above go parabolic while the other barely budged?
This is the question that drives many traders crazy. They blame manipulation, market makers, or just bad luck.
But most of the time, the answer is much simpler …
If you’re trading short-term, one single factor can tell you ahead of time whether you’re likely to see a rocket launch or a slow grind.
Once you start paying attention to it, a lot of those “mystery moves” in the market suddenly make perfect sense.
Table of Contents
Float Is the Key
Float = the number of shares available to trade in the open market.
It’s the supply side of the equation. Pair a low supply (low float) with a sudden increase in demand (on news or hype), and you’ve got the recipe for explosive price action.
What Counts as “Low Float”?
The classic definition is anything under 10 million shares.
But my own rule of thumb is anything under 20 million. Those stocks can still move like crazy, depending on the catalyst and volume.
Low-float stocks are like speedboats… It doesn’t take much to send them flying.
High-float stocks, on the other hand, are like freight ships. It takes a mountain of buying to get them moving, and even then, it’s usually slower and steadier.
That was my explanation of stock float…
But what about options? Want to learn more about them?
Many traders are intimidated by them. They think…
- Trading options is too complicated.
- Trading options is too risky.
- Trading options is all about luck.
My friend and expert options trader, Ben Sturgill, wants to debunk all of those myths.
Watch Ben’s video below to get the REAL truth about options…
Case Study: High Float vs. Low Float
Stock #1: RedCloud Holdings (NASDAQ: RCT)
- Catalyst: The company announced yesterday morning that it was joining Nvidia’s AI Connect program. As always, any mention of Nvidia in a press release can send a stock flying.
- Float: 6.6 million shares.
- Price action: When the news dropped, RCT almost doubled within 5 minutes.
RCT Intraday, 5-Minute Candles Chart; SteadyTrade
Stock #2: Opendoor Technologies (NASDAQ: OPEN)
- Catalyst: The recent rate cut is a boon for homebuilding, housing, and related stocks.
- Float: Huge at 667 million shares
- Price action: A steady climb from Tuesday afternoon through Wednesday afternoon for a return of 23%*.
OPEN 2-Day, 5-Minute Candles Chart; SteadyTrade
The rate cut is a great catalyst for OPEN, but with that much supply, momentum builds gradually.
Should You Trade High Floats?
Absolutely… Just know what to expect.
- Low float = faster, higher-volatility moves. These are perfect for short-term momentum traders.
- High float = slower, steadier action. These are better suited for swing trades, longer setups, or institutional news plays.
Neither is “better” than the other, but you have to match your trade style to the float.
My Final Thoughts…
If you’re wondering why your “hot news stock” is crawling while another skyrocketed, check the float.
- Low floaters can spike fast and furious.
- High floaters grind slower but can still trend strong if the right setup’s there.
Float tells you how quickly supply and demand can move a stock. Once you understand it, you’ll stop being surprised when one ticker explodes and another barely twitches.
The next time you’re lining up a trade, don’t just ask, “What’s the catalyst?”…
Ask, “What’s the float?”
Chances are, that number will tell you everything you need to know.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
Have you ever traded inverse ETFs? Read my blog post before you do.
Another sector is in the spotlight. Here’s what I’m watching.
This pattern is showing up almost every morning. Learn how it works ASAP.