Here are two charts for two very different stocks:
The first is for SoundHound AI Inc. (NASDAQ: SOUN):
SOUN 2-Day, 5-Minute Candles Chart; SteadyTrade
The second chart is for Jet.AI Inc. (NASDAQ: JTAI):
JTAI 2-Day, 5-Minute Candles Chart; SteadyTrade
So why are these two stocks so different?
Yes, the companies are not at all alike in what they do as a business, but what I’m talking about is float size.
SOUN has a float of about 274 million shares and is considered a high-float stock.
The float for JTAI, on the other hand, is only around 60,000 so it’s a low floater.
The general rule is that any stock with under 10 million shares available to the public has a low float.
For high-float stocks like SOUN, we trade on dips. In fact, on Friday, I told my Premarket Prep audience exactly that: “SOUN is a big float stock, so buy on the dip.”
For stocks like JTAI, our strategy is very different…
Table of Contents
What is Float?
First the basics…
A stock’s float is the number of freely tradable shares available in the market.
Every stock has a set number of shares, but not all are available for trading. Some are tied up with insiders, institutions, or employee compensation plans.
The float is the “supply” that day traders, swing traders, and investors can actually trade.
To put things into perspective, Microsoft’s (NASDAQ: MSFT) float is around 7 billion.
And NVIDIA Corp (NASDAQ: NVDA)? 23.5 billion.
Now compare that to a low-float stock (less than 10 million shares), and that’s where things get interesting.
Why Are Low-Float Stocks So Powerful?
Low-float stocks are the ones that can make huge moves within a single trading day.
I mean, look at JTAI on Friday…
It went from $6.08 per share to a high of $10.25 in less than ten minutes!
Why does this happen?
It’s simple economics: low supply, high demand.
When a low-float stock gets attention—maybe because of breaking news or a hot sector—there just aren’t enough shares to go around.
JTAI, for example, announced Friday morning its purchase of a fleet of planes.
That kind of story creates interest and in this case, a buying frenzy.
Anyone remember the Cabbage Patch Doll craze in the ‘80’s?
Oh, what people would do just to have a Cabbage Patch Doll!
Similarly, when you have a lot of buyers for a stock with not a whole lot of shares, you’ll see explosive price moves.
Your Trading Game Plan for Low Floaters
Instead of buying on the dip like we do for high-float stocks, you want to chase the low floaters…
But only under one condition:
You see high multiples of float rotation—that’s a key signal for potential explosive moves.
So, what’s float rotation?
It’s simply the trade volume divided by the float number.
It indicates volume is mounting and that’s what we want to see to know these moves are real and the strong demand is there.
As a day trader, you want to target stocks with multiples of float rotation. The higher, the better. Here are some simple guidelines:
- Look for anything rotating above 9 or 10X pre-market and above around 5X during regular hours. If you see multiples like that, that’s a must-stock watch for the day.
- A 20X float rotation? Even better.
When I started seeing JTAI move Friday morning, its rotation was around 9.15X. The multiple quickly rose after that.
Always remember, these stocks move very fast and explosively. You have to be ready and have a risk-management plan in place (i.e., a stop-loss level).
Like my hero, Ivan Drago from Rocky IV, says, “If he dies, he dies.”
That applies to low-float stocks. Once the spike is over, they’re pretty much dead. Don’t be left holding the coffin.
Play it safe by…
Paper Trading First: Before you dive in with real money, practice your setups and strategies in a risk-free environment.
Having a Plan: Always know your entry, exit, and stop-loss levels. Discipline is everything. Don’t hold and hope. Stick to your rules.
The Best Tool for Trading Low Floaters
Our StocksToTrade trading platform is tailor-made for hunting low-float stocks.
Every feature, including screeners, filters, watchlists, and charts, gives you float data.
StocksToTrade is my top pick and I use it every day. You should too! It also has a selection of add-on alerts services, so you can stay ahead of the curve.
Grab your 14-day StocksToTrade trial today — it’s only $7!
My Final Thoughts…
When you’re trading low floaters with potentially massive price moves, keep an eye out for float rotation. The higher the multiple, the better.
Make float rotation one of your go-to metrics, and it’ll give you a real edge in spotting high-potential plays.
If you’re serious about growing a small account, these types of stocks should absolutely be on your radar.
They’re volatile, exciting, and can be incredibly rewarding—but only if you approach them with a solid game plan.
To learn more about trading low-float stocks and others, join our StocksToTrade community.
We have tons of free live webinars that run all day and offer trading tips and tricks, info on our Oracle system, and other valuable training.
And for more mentorship on day and swing trading, stock ideas, and more, join my StocksToTrade Advisory service.
Every STT Advisory member gets a monthly newsletter with a list of my top picks, three weekly videos with my watchlists, bonus reports, and more.
Sign up for StocksToTrade Advisory right here!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade