Cheat Sheet with preset for various Trading Scenarious

Generic recommendations for trading scenarious as example for Average Volume, Market Cap, Price and Age/IPO.

Generic Recommendations

  • Average Volume > 100,000 (> 1,000,000 for Options)
    The average daily traded shares over the past 3 months should be larger than 100,000. This lowers the spread and makes it easier to find a seller/buyer in time.
  • Market Cap > $500 million (> $1000 million for Options)
    Nano cap stocks should be excluded to make sure that the share price cant be manipulated with pump and dump schemes.
  • Price > $7
    Penny stocks should be excluded due to various information issues and manipulation of these stocks.
  • Age > 2 years
    At least two fiscal years or 8 quarters of fundamental data (balance-, income- and cash-flow sheets) should be available in order to make proper research.