How To Trade A *Low Float* Stock Without Blowing Up Your Account

In today's video Steve discusses how to trade low float stocks without blowing up your account with an example from MBOT. Register for our free intensive trading webinar smbu.com/spencer
#LowFloat #stockmarket #daytrading
SMB Disclosures www.smbtraining.com/blog/smb-...

[@lencsezoltan]

Beyond excellent. Less noble people charge money to give way less. This was practically a detailed description of a solid and ever present trading strategy. The stocks most retail forget about on day 2-3 still have enough meat and are way easier then guessing the top on day 1.

[@smbcapital]

thanks a lot Zoltan!

[@joep9764]

Awesome explanation I play these long usually day 2 and short after resistance (day 3/4/5)

[@wakalmercedesreyes1865]

Thank so much Steve great explanation for the trading community thank so much God Bless you.

[@1Sulster]

Steve, what a great explanation and review for these low floats. This has cleared up much of the thoughts I had on trading these types of stocks. I am now reviewing how this would have applied to the KALA trade just this week. Thanks to you and SMB for the great content you provide to the trading community.

[@mikeanis8554]

Great job Steve. I watched this one all pre market and all day (I was up early). Very intrigued by the RS but didn't find short locates to trade it. I'm so humbled by what you guys share, a million times thank you.

[@bo4arrow]

what is the RS?

[@mikeanis8554]

@@bo4arrow the stock had a reverse split.

[@razzyp3999]

Thanks Steve great helpful video .. cleared some things up for me.

[@jcrockett870]

By the way, Spencer is a good teacher.

[@barkingshark6413]

I’ll be joining your class when I get back from my winter getaway.

[@smbcap]

great!

[@davidhazen2394]

HI I was curious if you could tell me why EJH public float has not changed regardless of doing three offering in the last few months. EJH is a Chinese Company trading on the U.S stock exchange. I am trying to figure out if any of these last three offering shares will end up in the public float. How can you look at the prospect to know if the shares will show in the float. Also, how do you know that the shares are restricted? And how can you tell the time frame for shares to be restricted from selling on the open market.

[@danielwestereng155]

Thank you so much for this!

[@bullforcetrading9995]

Low floats have awesome profit potential if you are mindful of your risk.

[@smbcap]

indeed!

[@luciandinu1466]

Great information, many thanks for that, but the verbal speed is too fast for me (and I think most of others) to keep track of the information. Classic Steve ...:)

[@smbcap]

i don't have all day to do these videos! ;)

[@jeffreyhulse5266]

You made a big scary point in this one that even traders at your desk can completely control some stocks. Have to keep that in mind. I working on being a gap and go momentum trader, have seen many big flushes. Thanks for your insight and videos. Keep up the good work.

[@MrDre6000]

Jeffrey Hulse Don’t be fooled. The prop traders are never in control of any stock on the market.

[@smbcap]

that was just a hypothetical. from a risk perspective we would never allow our traders to control that large of a % of the float BUT there are definitely large independent traders out there who would. if they do the SEC requires them to file a statement of ownership.

[@smbcap]

@@MrDre6000 that is incorrect. they would never control a large cap but for a low float this certainly could be the case.

[@MrDre6000]

@@smbcap Of course, well funded traders/firms could hypothetically control the float of these low float stocks, but that is rarely the case. What I meant was that the controllers of these tickers have a longer time horizon and are usually listed in the SEC filings, just as you stated, while the prop traders are looking for more short term opportunities on a daily basis.

[@surajmathial4160]

Is it possible that a large market order doesn’t get filled at all because extremely low volume ?

[@mitchdenman109]

Moses with 20 commandments here.. thanks Mike this is gold. Love how trading has pushed me to take better care of sleep, diet, and overall intelligence and discipline

[@smbcapital]

that's great!

[@HighTimesTrader]

Thanks, Steven!

[@analyst1777]

Does the fundamentals of the company matter when choosing low float stocks

[@rockyou79]

Hey Steve, I was thinking you focus more on large cap stocks, good video thought

[@lombardo141]

G A they have a huge range of traders. Some trade big caps, some trade small, some trade futures and options. It’s sounds backwards but small floats are for experienced traders imo.

[@smbcap]

i think generally you should as they offer more consistent opportunities. eventually you will want to add this to your quiver as well!

[@shlomozerbib388]

Problem is that your stop could be execute far away from where you place it because of the lack of liquidity. I prefere large and mid cap stock (especially with the $itci last days which is in fire) :)

[@smbcap]

see my response to Scott above...

[@shlomozerbib388]

@@smbcap okay understood :)

[@StuartFerguson55]

But which broker should I use if I want to short these low float small caps?!? Thanks!

[@jcrockett870]

I have multiple brokers, none of them have shares, and every time we get a big runner, people make videos on how they shorted it. I don't know what they use, they have said they use Lightspeed , but when I had ls I still had troubles locating shares.

[@MN-TX-NC]

Tradezero, Centerpoint and Speedtrader are generally the best brokers for short locates. The usually are going to cost you a lot of money per share to locate them though and can run out of availability. If you have a big account and can afford to spend a lot of money on locates there is a lot of money in shorting low floats. I don't like the cost and risk of squeezes. Not my cup of tea. Etrade is actually really good for locates too, but easily runs out of shares if the float is lower and gets lots of volume.

[@StuartFerguson55]

@@MN-TX-NC Hey, thanks for the reply. How much per share are we talking here? Like 5-10 cents? or more? I know the super nova runners are going to be like a dollar per, but I'm not sure about the more common ones that maybe go from like $3 to $10 or something like that.

[@smbcap]

@@StuartFerguson55 next time we do a video on one of these i'll make sure we mention the price. it will always be at least 1 cent per share. if something has a really low float like under 1mln the price can definitely be more than 10 cents!

[@StuartFerguson55]

@@smbcap Hey, I really appreciate the info. Obviously 1 cent per isn't too big of a deal. But once you get into the 10 cents + range, you really have to hit a winner to make good profit. And again, which broker? I'm also looking for a broker with fast execution speed if I want to hit these breakouts to the long side. All questions aside, I really love the content you guys provide. It has given me a new prospective on what is necessary on my part to become consistently profitable. Thank you.

[@rsandhu02]

Trading these tickers will take years off your life if you don't control risk

[@BenTrades]

Or if u dont stop after ur daily goal

[@smbcap]

agreed!

[@scottsomer4150]

This is the land of Pump and Dump, I will pass, like better liquidity.

[@smbcap]

when there is a strong catalyst the liquidity comes in for a few days. i don't trade low floats every day. probably around 10% of the trading days each year.

[@jcrockett870]

This is very informative, but it's a little bit of Monday morning quarterback... Also, this wasn't available to short on TOS, also...it could have kept going up ...

[@smbcap]

it's called a *trade review*. learn how to do it if you want to be successful as a short term trader.

[@jcrockett870]

@@smbcap thanks for the feedback.

[@yosconisi]

This video was like giving away free money! Thanks Steve!

[@mike212916]

oh yeah, how's that free money going for you lol.

[@neuvocastezero1838]

*It's just prop traders vs. retail traders pitting their skills against one another as traders.". I'm gonna get wiped out.

[@hellowhat7803]

i see a bottle of mouth wash lol

[@tinyboy2006]

🔥🙏🙏🙏

[@romiliomillermartin6851]

Off topic. But is that mouthwash sitting at that desk?

[@smbcap]

probably!