This article discusses the available tools, applications, websites and ways to identify the most volatile stocks currently trading. Also discussed are the different volatility criteria, and points a trader should consider before selecting a criteria or tool.

Set and define your volatility criteria:

Volatility is a wide-ranging term, as there are different criteria, mathematical models, calculations and concepts applied to measure and assess volatility. Different traders may have their own criteria for volatile stocks. A few examples:

  • For some, volatile stocks may simply be the ones having the largest difference between HIGH and LOW price of the day,
  • For others, they may be the most active stocks with highest volume,
  • For the rest, they may be those screened based on mathematical models and complex calculations taking historical data into account and so on

A trader needs to identify and finalize his own “volatility” and then look for tools, applications and data content matching that criterion.

Additionally, volatility based trades can be categorized into two streams:

  • Currently Volatile – stock which is currently showing high swings
  • Expected to be Volatile – stock which is currently stable, but expected to breakout in near future with high volatility

We'll focus on the first stream, as the second one relies more on future expectations rather than current actions, and may remain dependent on expected earnings reports, the outcome of a large project that the company may have bid for, etc.

Sources to identify tools and applications to find the most volatile stocks:

Most trading based on volatile stocks is aimed for instant action. Simple volatility criteria may include:

  • Most Active by Share Volume
  • Most Advanced
  • Most Declined
  • Most Active by Dollar Volume, etc.
  • Additionally, parameters in the corresponding derivatives market (Open Interest, Volume, Put Call Ratio, Implied Volatility, etc.) can also be used to assess the volatility in underlying stock

For such indicators, it is best to directly hit the official exchange website, which is free of cost. Usually, exchanges across the globe maintain a real time live updating dedicated section for the above mentioned criteria. Examples include:

nasdaq most active stocks
nse live

Third party online free tools:

Besides the exchange based live data, one can look at various available applications (which include browser based interfaces and mobile apps), using which defined criteria can be selected or set for a quick view on high volatile stocks. Here is an indicative list:

  • StockTA: The “Advanced Stock Screener” section of StockTA offers a good mix of technical indicators including those for volatility on US and Canadian Stocks.
  • StockFetcher: This site offers a customizable tool where one can literally write (set) his own criteria to screen the stocks matching a desired pattern. Here is an example of picking up the volatile stocks with a simple query:
stockfetcher
google stock screener
  • ChartOasis: Offers downloadable technical analysis software along with market data file to generate the required analysis, breakout patterns and other indicators including those based on volatility. It is also useful for backtesting any trading strategy on historical data

The Challenges with free tools:

  • Not everything may be free. Usually, basic quotes and charts may be free with other premium features (with/without a trial-period)
  • Free content available may not always be real time, but delayed by a few minutes to one day
  • Free tools may not cover all desired markets and regions
  • Limitations in terms of available criteria and functions, where user desired functionality may not be available to the full extent
  • Lack of customization option

Beyond the free tools, the premium products:

The above mentioned constraints may force active traders to look for paid tools on the above mentioned resources, or alternatively, one can also go for dedicated software products from big market data players which come at a premium price. Here are a few examples:

These dedicated products may come at medium-to-high costs and may often need long term subscriptions. Before signup, please ensure that the available functionality matches your requirements.Your best bet is to take a trial version and test it thoroughly during the evaluation period.

Explore building your own tool:

With the advent and easy access of technology, active traders can explore building their own quick app, program or interface to get their own desired volatility stock screeners. Although it may need study and hands-on experience at the start, it can go a long way for all trading activities, facilitating a lot of tasks for traders. Commonly used concepts are traders using programs (like Perl scrappers) to extract real time live data from exchange websites or market data portals and further parsing it in the program according to desired criterion, and getting the desired screening of stocks.

The Bottom Line

Tools, software, programs and websites act as good source of content in multiple forms (data, charts, indicators, patterns, etc.). Using volatility based parameters for day trading can yield profitable opportunities provided the set criteria is clearly understood and right tools are selected to be used with the right precision.