If two stocks are the same price, the companies must have the same value, right?
| | | Why Small Cap Can Mean Big Moves | | | If two stocks are the same price, the companies must have the same value, right? Nope. Stock price is only a small piece of the puzzle. To determine the true market value of a company, you've gotta look at the company's market capitalization (market cap, for short.) What's a market cap ... and how does it affect how you trade a given stock? Read on to learn the answers to these questions ... I'll even tell you the market cap I prefer for my trades. Hint: sometimes less is more. |
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| | | I'd love to find out what your story will be… |
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Calculating market cap is a simple equation — but honestly, you don't even have to do the math yourself. You can look up the market cap on any finance data website like Yahoo! Finance or Marketwatch. But in case you want to impress your friends or just want it for your own reference, here's the equation: [stock price] * [shares outstanding] = Market Cap Easy, right? The tricky part is that these numbers can (and do) change. The stock price changes all the time. For traders like me, that's the reason for being — to attempt to profit from price fluctuations. But did you know the number of shares outstanding can change, too? | A stock's price changes as buyers and sellers interact with each other on the open market. The number of shares outstanding, on the other hand, is controlled by the company. New shares can be added in the form of an offering. Logic would dictate that if the stock price stays the same and new shares are added, it should drive the market cap higher ... right? Not so fast... In theory, the market cap should be the same after an offering. But you've gotta remember: the market's driven by supply and demand. That's never constant. In reality, the new shares are added supply. If the demand doesn't increase in kind, the stock price will fall. Often enough, the share price will fall with a new offering. Companies can remove shares from the market, too. Shares can be taken out of circulation through buybacks. This can actually work to drive the stock price up. When completing a buyback, the company is buying shares on the open market. Since supply is diminished, it can increase demand. Why should you care? Because supply and demand matter in the market! | |
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| | Tim Sykes is a self-made multi-millionaire... He became one by trading one simple penny stock pattern over and over again… What could you do with a secret weapon like that? |
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Think back to that high school economics class that you mostly slept through. Chances are you at least picked up the concept of supply and demand. If not, here's a quick summary: When demand increases, prices tend to increase. When supply increases, prices tend to decrease.
So, any time there is buying and selling going on, ask yourself: what is this doing to the supply and demand? If you can answer that question, you're on the right track. Now that you're better-educated, let's cap it all off by talking about how it relates to trading… | The bigger the market cap, the bigger the supply of shares. The smaller the market cap, the smaller the supply. If you want to see a big price move, you need to look for increasing demand. But if there's a big supply, the demand will get absorbed without too much of a price move. That's why I prefer keeping my eye on small caps. Stocks with a relatively low supply of shares are much more likely to have big price spikes. | Think Small (Cap, That Is) I love trading small-cap stocks. I've found that companies with only one or two products have the best potential to make huge moves. Mega-cap stocks like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), or Apple Inc. (NASDAQ: AAPL) all have market caps of over $1 trillion. That means it takes billions in buying power to make the price move. The small-cap stocks I like to trade typically have a market cap of under $1 billion. They only need a few million dollars to drive a significant price spike. |
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| "This ISN'T the Trader You're Looking For…" | | There's a guy who's made about $3 million in 2020…
He trades from his home in Arizona.
And he's fairly secretive about his success.
Maybe he's not the trader you've been looking for...
Maybe you haven't seen his name in the headlines… Buy maybe… just maybe… you should hear what he has to say. | | |
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Not every stock that trades for $20 is actually valued the same. The stock price is only half of the equation. As a momentum trader, I like to find a stock that has the most potential to make big moves. That means finding stocks that could experience increased demand. The lower the supply, the easier it is for a stock to jump 20%, 50%, or even more. This year I've had a few trades where the stock price doubled!* These big moves all come down to supply and demand. | The stock market can be counterintuitive — things don't always make sense on the surface. That's why you've gotta take the time to understand what drives price movement. Supply and demand are the key forces that drive prices in every market. Nowhere is it more evident than in the stock market. It might seem overwhelming at first. But once you understand these market mechanics, you'll be able to make more intelligent and calculated trading decisions. Be calculated, Paul Scolardi Editor, Swing Trade Millionaires | P.S. I saw an article the other day talking about "September gloom"... It's what we're experiencing now. It means this - trading stocks isn't going to be "easy" like it's been all summer. We're headed for hard times. We have an insane election coming up. And it's not going to be pretty. But political events make the market move… so it can be profitable. So now's the time to get educated. If you don't want to be another stock market statistic… And you want to continue profiting through the tougher market… You should get Tim Sykes in your corner. He's created six millionaire students through his Trading Challenge… And he wants YOU to be next. If you think you've got what it takes to be his next millionaire student… Click here to see the path | | *Results not typical. Paul Scolardi teaches skills others have used to make money. Most who receive free or paid content will make little or no money. Most traders lose money. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services. Past performance in the market is not indicative of future results. | This is for information purposes only as Millionaire Media, LLC is not registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. We are not a licensed investment professional, and we do not give investment advice. Always consult a licensed investment professional when seeking investment advice. Millionaire Media, LLC cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media, LLC in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media, LLC accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns. | | |
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