Should You Trade IPO stocks? Day Trading — Transcript

Full transcript

1. 0:00hello guys steven dux here welcome to
2. 0:01this new youtube videos
3. 0:03and today we're going to focus on the
4. 0:05strategy that was
5. 0:07producing uh for the entire decembers
6. 0:09and for the last two weeks we're pretty
7. 0:11much playing with
8. 0:12ipo related stocks so today i have
9. 0:15summarized three things you guys can
10. 0:16focus on
11. 0:17uh when you are trading this type of ipo
12. 0:20related stocks
13. 0:21so before i start this video make sure
14. 0:23to click the like button and subscribe
15. 0:24let's get into today's content so the
16. 0:27first thing
17. 0:28you want to remember is ipo is called
18. 0:31initial public offering
19. 0:32and it's basically the first day that
20. 0:35stocks appear in the stock market
21. 0:37and you will have its own float brand
22. 0:40new market cap
23. 0:41a lot of people are trying to get into
24. 0:42the stocks in the first day
25. 0:44so it makes the first green day
26. 0:46untreatable
27. 0:47pretty much throughout the entire day so
28. 0:49let's look at the tickers called wnw
29. 0:52that happened the last week pretty much
30. 0:54all tickers have
31. 0:55high volume low flow it's going to
32. 0:57behave very similar to wnw
33. 1:00let's try to look at the entire action
34. 1:02and to see what we can learn from it
35. 1:04so wnw uh initial public offering
36. 1:07has started around seven and so right
37. 1:10now
38. 1:10the price for w w is 75
39. 1:15normally to calculate the initial market
40. 1:17cap i will use
41. 1:18how much it gained from seven so again
42. 1:21over a thousand percent
43. 1:22and we're using uh the overall market
44. 1:25cap and 75 dollar divided by 10 because
45. 1:27it gained
46. 1:2810 times over then seven so uh
47. 1:32initial market cap we can calculate from
48. 1:341.88 billion
49. 1:35divided by 10 that's around 188 million
50. 1:39in terms of initial market cap so once
51. 1:41we calculated
52. 1:42uh the initial market cap will be 188
53. 1:45million and the flow
54. 1:46is under 20 million so it's considered a
55. 1:49low flow
56. 1:50the amount of volume we've been getting
57. 1:51i will get into that into the second
58. 1:53point
59. 1:54so let's look at the first green day as
60. 1:57i said
61. 1:57a lot of people trying to get in pretty
62. 1:59much make it untreatable
63. 2:01shares are not available some shares
64. 2:03were available
65. 2:04by the late of the day that's because
66. 2:07the stock is brand new so there's not
67. 2:09enough supply
68. 2:10out there for you to really get it
69. 2:13except your hedge fund on the second
70. 2:16green day
71. 2:17this is a really tricky part the stock
72. 2:19dropped in the pre-market
73. 2:20and they force the stock to go into
74. 2:22short sale
75. 2:23restriction so basically it makes it
76. 2:26much harder to short
77. 2:27and also brings tons of trap for short
78. 2:30sellers to fall in
79. 2:32so uh the first resistance that was
80. 2:34considered to be
81. 2:36a pre-market resistance it was around
82. 2:381.05
83. 2:39and i do see a lot of people trying to
84. 2:41use 105
85. 2:42as risk to short into the stock
86. 2:46but let's reverse back to the point i
87. 2:49want to make
88. 2:50about volume so when you are trying to
89. 2:52read
90. 2:53ipo volume you have to read in terms of
91. 2:56volume times the average price it's
92. 2:59because
93. 2:59during the normal market conditions that
94. 3:02the stock
95. 3:02can go up to 65 a share or 85
96. 3:05a share is very difficult is because the
97. 3:07stock is way too expensive
98. 3:10for normal investors to buy so in this
99. 3:12case
100. 3:13we're using the small volume times the
101. 3:16average
102. 3:17price to calculate how much actual
103. 3:20dollar was being traded
104. 3:21into this taker so let's look at the
105. 3:23five-day chart whenever you are looking
106. 3:25at ipo stocks
107. 3:26there's no historical chart and it's
108. 3:29pretty much only two or
109. 3:31in terms of historical chart so we want
110. 3:34to look at december 17th
111. 3:36we traded around three million shares
112. 3:39and the consolidation is
113. 3:42anywhere between 120 to 140.
114. 3:46so let's pick the middle of the
115. 3:47consolidation let's use 120 120 times
116. 3:503 million you traded overall 360 million
117. 3:54in terms of amount of dollar that was
118. 3:56traded in that day
119. 3:57the third point i want to point it out
120. 3:59is once you know how much dollar was
121. 4:01traded in that day you will know that
122. 4:03if the volume is actually sufficient or
123. 4:05not because
124. 4:06if the stock trades over 300 million in
125. 4:08one day then the stock itself becomes
126. 4:10shortable in terms of
127. 4:12liquidity and you don't have to worry
128. 4:13about you can't really exit and your
129. 4:15size is going to affect the stock price
130. 4:18so the total three point will be
131. 4:19uh try not to trade on the first green
132. 4:21day because
133. 4:23there is a lot of volatility hope second
134. 4:26i will be
135. 4:26make sure to spot the correct market cap
136. 4:28and float
137. 4:30and the third one was the stock proof
138. 4:32itself that is tradable
139. 4:34uh make sure focus on your risk reward
140. 4:36it is very important
141. 4:37because the maximum reward normally
142. 4:40lands from
143. 4:4150 to 75 maximum so that will be of the
144. 4:44three points i want to cover today
145. 4:46make sure leave a question below i
146. 4:48understand that the third point is a
147. 4:49little bit confusing
148. 4:50so if you have any questions uh make
149. 4:53sure to leave a comment below i will see
150. 4:54you guys in the next one
151. 5:03[Music]
152. 5:12[Music]
153. 5:24you