3 Ways That World Events Cause Penny Stocks Movement
When it comes to buying and selling penny stocks, world events are likely the main cause of market movement. Wars, natural disasters, and other geo-political, and economic events can all have a profound effect on both penny stocks and blue chips.
Now, the most common reasons that a penny stock will move tend to be on a smaller scale. This includes industry-wide happenings, company-specific events (like earnings reports or analyst ratings changes), or even just the rumor mill. But, world events are still a major driver of stock prices. As a result of this, it is crucial to be aware of any large-scale events that could impact the stocks you are interested in.
In addition, it is important to be aware of how these events could affect the overall stock market, as this can also have an indirect effect on penny stocks. Right now we have several events that are at play including Covid, Monkeypox, geopolitical tensions, inflation, and much more. And because of that, it is more important than ever to be up-to-date on the latest happenings. With all of this considered, let’s take a look at how these events could be profitable for you and your trading.
How To Use External Events to Make Money With Penny Stocks
- Events Cause Stock Market Movement
- Some Industries Are More Volatile Than Others
- What Events Are Going on Right Now?
Events Cause Stock Market Movement
When you invest in penny stocks, you’re essentially betting on the future performance of a company. If you think a company will do well, you’ll buy its stock, and if you think it will do poorly, you’ll sell. The movement of stocks is dictated by the collective actions and expectations of all the investors in the market.
And well it does go deeper than this, this notion is the basis of how penny stocks and blue chips trade. Now, when it comes to penny stocks, we see that speculation is often much greater. Therefore, world events have a much larger impact on the prices of these stocks.
Some examples of events that can cause stocks to move include:
- Earnings releases
- Analyst upgrades/downgrades
- FDA announcements
- Mergers and acquisitions
- Natural disasters
- Political turmoil
In general, stocks will move higher when there’s good news and move lower when there’s bad news. But it’s not always that simple. Sometimes, stocks will move in anticipation of an event. For example, a stock might start to rise a few days before an analyst releases a positive report. And sometimes, penny stocks will move even though there is no news. But, staying ahead of the game will always be your best bet for profitability.
Some Industries Are More Volatile Than Others
Why are some stocks more volatile than others? The simple answer is that some penny stocks are more volatile because industries have different rates of volatility. For…