Small cap stocks, or stocks with low volume, can be attractive for some traders who are looking for companies that the rest of the market might be ignoring. If a stock has low volume, it can often be near a reversal point as buying or selling peters out.
Similarly, small cap, micro-cap, and penny stocks are attractive because they’re not followed by most investors. Banks and funds focus on large cap stocks as these are more able to absorb large investments. As a result, it can take very little to push a smaller stock up to new highs, or down to new lows.
Of course, this also means that smaller cap stocks are more illiquid and therefore dangerous. High spreads mean that you’ll need a bigger percentage move in order to break even while it’s also harder to exit trades.
How to find the lowest traded individual stock yesterday: by volume
There are several ways to find low volume stocks and your broker is probably the best bet to get up to date information. If you use Interactive Brokers, this can be achieved by opening up Trader Workstation, clicking File>> New>> Market Scanner.
You can then drill down into different markets and filter stocks by price and volume.
There are also free alternatives such as the scanner at Finviz.com and these are easy to use.
To find the lowest traded individual stock by volume from yesterday’s market just head over to Finviz and click on the screener tab.
Then, simply click on the ”volume” column on the far right and Finviz will sort all stocks by volume traded.
The result will show many different equities that had no volume. For some of these stocks, the figures are correct and it is not unusual to see some securities with zero volume. However, for some, the data might be wrong, so it’s a good idea to look at the stock with another source; such as Yahoo! Finance or Bloomberg.
Finding the lowest traded stocks in the S&P 500
Looking for the lowest volume stocks is not always that useful when looking at the whole universe but narrowing down to a smaller watch list can be. To see lowest volume stocks in the S&P 500 index just change the index field on Finviz to S&P 500. As you can see from below, the lowest volume stock traded yesterday was Graham Holdings $GHC; only 55,556 shares changed hands.
Finding the smallest stocks with the screener
It’s a similar process for finding the smallest stocks. Just head over to the screener and sort by the ”price” column. As the image shows, Internet Architecture HLDRS $IAH was the smallest stock on the Finviz platform yesterday trading at $0.03.
As you can see, Finviz is a great free tool and with just a few clicks you can start making inroads into lots of different strategies and ideas.