There isn't a perfect day trading stock, as trading styles vary by trader. That said, most day traders prefer tight spreads and lots of volume. A lot of price movement is also something many day traders seek; it is easier to jump in and out for a profit in a stock that is moving a lot, compared to one that isn't. The following four stocks combine liquidity with excellent intraday price movement, making them ideal for most day traders. Conditions do change though, so while these stocks currently offer what day traders are looking for, weeks or months from now they may not.
ZIOPHARM Oncology, Inc. (ZIOP) has a 100-day average volume of 3.9 million shares per day. The stock has an average day range (from high to low) of 6.9% over the last 100 days. Between the start of May and July 28, nearly every day has moves greater than 4%. The stock is shortable, but a high short interest can make the stock hard to borrow some days. The ZIOPHARM chart shows the 6-month daily price history, daily volume and the performance of the stock (percentage) over the 6-month period.
Synergy Pharmaceuticals, Inc (SGYP) highlights a problem with relying only on averages. Two days in June, with very large volume and movement, have skewed the averages making the stock look like it is more liquid and volatile than it actually is most days. 30-day average volume is 9.2 million shares per day, while the 100-day average is 4.3 million shares. Both stats are elevated. During a typical session traders can expect two to three million shares to change hands. Since the start of May the average percentage movement between the high and low--what day traders care about--is between 3% (on low volatility days) and 10%, with the 100-day average being 6.78%. The stock is shortable, allowing day traders to buy or sell or with ease, trading in whatever direction the stock may go intraday.
Bill Barrett Corp. (BBG) has been a stable day trading stock, in terms of volume and volatility, since 2014. Short and long-term average volume is near 2.5 million shares per day. Low volatility days typically see the price move 4% between the high and low, while higher volatility days see moves of 10% or greater. The 100-day average day range is 7.29%. The stock is shortable.
Basic Energy Services, Inc. (BAS) has also been a solid day trading stock for more than a year. Long and short-term volume averages are just below three million shares per day, and the 30-day daily average range is 7.28%. Low volatility days typically move more than 4% and are relatively rare; intraday price moves of 5% or more are common. The stock is shortable.
All these stocks are priced below $20. The current share prices allow day traders to trade stocks with volatility and volume, at an affordable price for smaller trading accounts.
For those seeking greater volume, the SPDR S&P 500 (SPY) is popular among traders of all types. For those seeking significant volume and volatility, the iPath S&P 500 VIX ST Futures ETN (VXX) or VelocityShares 2x VIX ST ETN (TVIX) are currently offering both in abundance.
The Bottom Line
These stocks are of potential interest to day traders because they provide liquidity and significant daily percentage price movements each day (usually). No specific direction or trade is recommended. Anyone who day trades should have a sound strategy they trade, and be prepared for the volatility these stocks offer. Conditions do change though. A stock with high volume currently could see it reduced (or increased) in the weeks ahead. volatility could also increase or decrease. A good day trading stock can typically be traded for several months or more before conditions change enough to consider trading something else. Some day traders trade the exact same stock, ETF, or several stocks/ETFs for their entire career.
The author doesn't have positions in any of the stocks mentioned.