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Through their purchases, large capital gains can be produced, above the profitability offered by the values of the national selective index. But be very careful, because the losses are generally also very pronounced. Volatility governs the behavior of your stocks.. It should come as no surprise that fluctuations in their prices are the common denominator of their actions in the stock markets.
As soon as they rise more than 10% in the same trading session, the next day they double in a few hours. As a result of this peculiar evolution of the markets, these securities are highly desired by investors looking to carry out operations to make cash in a short space of time. They enter and leave markets very frequently. Something, on the other hand, that cannot be developed in the most solid values of Madrid parquet.
But when we talk about peas, we also refer to a series of companies that present identity signs that make them highly identifiable for any investor profile. In general, they are companies whose business lines are not consolidated corporately, or that even go through bad times in their administration. It should not surprise us, therefore, that their quotes are governed, more by expectations in their businesses than because of the reality of your business accounts.
How are these values?
If, however, you wish to invest in one of these companies, you should know that they have very defined characteristics that will determine their evolution in the equity markets. You will be able to achieve significant capital gains through your operations, but at the same time the risks will be significantly higher, even with the opportunity to lose a large part of the savings invested.
Faced with this complicated scenario before you, caution should be the first tool you should use when trading peas. It will be highly recommended that you protect your investment, through four strategies that are very effective in these cases. And that simply consists of the following actions.
- Allocate only part of your assets to this type of operation, which in any case should not exceed 30% of the savings available to formalize the investment.
- Place a stop loss order, to protect you from possible price drops. For this purpose, the best option is to impose the stop loss. You will be able to limit the depreciation of the value.
- You should only take positions in these values when they maintain a very clear uptrend, which invite you to take positions in the values, and refrain in the remaining situations.
- You must focus your operations exclusively on the short term, and if you find that you have capital gains, the best option will be to permanently close the positions.
Only through these well-defined actions will you be able to minimize the risks that your operations entail, and protect yourself from the most adverse scenarios for your interests as a saver. Not in vain, A good part of the small and medium investors have left a good part of their savings in these very particular values. Even though there will certainly be more than one who will have achieved excellent performance.
Strategies for trading peas
If you want to operate correctly with these very special values, you must necessarily import a series of actions that will be of great advantage to you to successfully start your relationship with equities. To get started, It is convenient that you identify these companies within the current offer generated by the Spanish Stock Exchange.
At least you will know what to expect and avoid making mistakes that you will later regret. At the same time, they will teach you to operate in the markets with more complicated financial assets, and as a result, they will open the doors to you to get more profits.
First key: they do not distribute dividends
One of the most remarkable characteristics of these values is that none distributes dividends to their shareholders. Not surprisingly, in general their companies do not give benefits and, therefore, this regular remuneration is not present in the remuneration policy of these companies. If you want to collect these payments, you will have no choice but to go to other more corporately consolidated stocks in the indices where it is listed. And that will generate an average annual return between 3% and 8%.
Second key: with little liquidity
They are listed companies, but with very little liquidity, since very few securities are traded on financial markets. They even make it very difficult for you to enter or exit their values, fundamentally when you carry out operations with important economic contributions. And that encourages the strong hands of the market (large investors or institutional) to manage their prices at will. Thus, they are not suitable for the minority, who have other safer alternatives.
Third key: they present extreme volatility
Fourth key: they are not the object of study by the runners
Most brokers and financial intermediaries do not take these values into account in the recommendations that they normally offer to their clients. And as a result of it, you will be missing a fundamental piece for its respective analysis. Tampoco tiene un precio target como resultado de esta variable. Y eso indudablemente te perjudicará valorar cuál es el precio más adecuado para comprar o comercializar tus acciones.
Fifth key: shares to one euro
At the same time, with a deviation of a few tenths in its price, the revaluation or depreciation will reach very high levels of volatility. Only the most expert investors will be in a position to undertake their operations and will not be exempt from risk in any case.
Key Six: Opportunities for the Company to File for Bankruptcy
One of the main disadvantages you have when opting for one of these companies is that may stop trading sometime as a result of your trading problems. With the serious damages that the unexpected appearance of these situations can cause. Experience should help you avoid these negative effects that can occur if you buy shares in one of these companies.
It is enough to remember the many listed companies of these characteristics that have passed through this unpleasant scenario: La Seda de Barcelona, Sniace, Terra, Pescanova, and a long list that will make you wonder if it is really important to highlight selecting this rental. management model. Spanish variable so excessively aggressive.
Seventh key: they are small-cap companies
Eighth key: they are listed on secondary markets
In order to have a clearer and more diaphanous idea of what these outliers are like, the best way to check it is to check that none of them is listed in the Spanish selective index, the Ibex-35, but quite the opposite, many of the chicharros that you can find in the current stock offer come from secondary listed markets, including the Alternative Securities Market (MAB).
It is not a model, therefore, to follow if it is one of the first times that you take positions in the Stock Market. At the same time, it is possible that many of these companies do not even know them, and you may even have problems relating them to a sector of business activity.
Ninth key: the risk of getting hooked
Las operaciones de entrada y salida del mercado serán muy importantes y pueden inclusive establecer el éxito de la operación. No habrá más remedio que ajustar los precios de compra tanto como be viable. Fundamentalmente si desea comercializar sus valores de forma rápida, y dentro de unos días (inclusive horas) desde la formalización de la orden de inversión. Es habitual, que si no lo desarrolla bajo estos parámetros, you can get hooked on the value. And as a result of this, you stay many months, and even years, without being able to redeem the shares under the same purchase price.
