Penny stocks have become some of the most actively traded names in the stock market today. There are plenty of risks involved, but if you’ve traded these cheap stocks, then you know that’s where the money is made. Today we look at a few hot penny stocks with high short interest.
Penny Stocks TL;DR 30-Second Summary
- When it comes to penny stocks with high short interst, there’s one goal traders have: make money quickly
- High short interest can lead to short squeezes under the right circustances
- Since short squeezes prompt aggressive moves in share prices, money can be made within a matter of days or even hours IE AMC Entertainment, GameStop in 2021
- Today we look at a few penny stocks that can be bought for under $5 right now and have higher levels of short interest
One of the biggest reasons traders hunt for high short interest is the potential for a short squeeze. What’s a short squeeze? To understand the dynamic, you should first understand what “shorting” is in the first place.
This involves traders borrowing shares from their broker, selling them in the market, repurchasing them at lower prices, then returning the borrowed shares to their broker. The goal is to take advantage of stocks expected to move lower, and the profit is made from the difference in the sale at higher levels and the repurchase at lower levels.
When a short squeeze happens, the expected drop doesn’t happen. The exact opposite becomes the case. As share prices rise, any traders shorting the stock begin losing money the higher prices rise.
Ultimately, a squeeze is triggered when shorts scramble to repurchase shares (sometimes in the event of a margin call), which compound momentum from regular retail buying. The snowball effect generally can create a quick and aggressive spike in the market. While this isn’t always the case, the first step is identifying short interest stocks.
Penny Stocks To Buy For Under $5
- Siyata Mobile Inc. (NASDAQ: SYTA)
- Petros Pharmaceuticals Inc. (NASDAQ: PTPI)
- SeaChange International Inc. (NASDAQ: SEAC)
- Applied UV Inc. (NASDAQ: AUVI)
Siyata Mobile Inc. (NASDAQ: SYTA)
Last week, Siyata Mobile stock surged to finish 2021 on a high note. In one of the more active sessions, SYTA jumped to highs of over $4.50, with more than 33 million shares traded by the end of the day. What’s more, not only is it one of the penny stocks with higher short interest, it’s also part of the “low float” stock group. This scenario makes for a volatile stock, and SYTA hasn’t disappointed over the last month.
What does Siyata do? The company offers push-to-talk devices and cell signal booster systems. New product launches and purchase orders have helped turn some attention toward the company going into year-end. These deals include $550,000 in orders to sell the company’s low-cost SD7 device to customers in the US and Europe, the Middle East, and Africa (EMEA). There was also another recent $1.3 million in orders for police and first responder customers in the EMEA.
Is SYTA A Short Squeeze Penny Stock? Fintel.io shows the latest short float percentage sitting around 12.61% as far as short data is concerned. In light of its lower float and recent activity, it could be one of the penny stocks to watch for January.
Read: Best Penny Stocks to Buy Today? 3 For Your Watchlist in January
Penny Stocks To Buy For Under $5: Petros Pharmaceuticals Inc. (NASDAQ: PTPI)
Petros is no stranger to big moves in the stock market. Today, shares continued soaring during premarket trading. This continues a multi-week trend that began in late November and was sparked by attention on the company’s STENDRA tablets. Thanks to its digital health marketing agreement with Hims & Hers Health Inc. (NASDAQ: HIMS), the erectile dysfunction treatment became a big turn-on for the market.
The company’s recent close of a $7.5 million financing round brought in new cash earmarked for expanding its men’s health platform. Fady Boctor, Petros’ CCO and President explained, “This latest raise, in which we are grateful that our largest stockholder continues to participate, creates our strongest cash position in the history of the Company going into 2022, which we believe to be a vital component in our strategic plans toward leadership in the men’s health category and allows us considerable flexibility and confidence in our ability to execute on that strategy.”
Is PTPI A Short Squeeze Penny Stock? If you’re looking at the short float data from PTPI, a little over 24% of the float is short, according to Fintel. While this is a generally higher percentage, it will be interesting to see how the market responds to the latest financing and if it impacts the PTPI rally.
SeaChange International Inc. (NASDAQ: SEAC)
SeaChange has been one of the hottest names in the small-cap space over the last month. That’s because rumors lead to reality; let me explain. Unless you’ve been living under a rock, you’ve heard of the social media app TikTok. With its growing popularity has come a slew of competitors with a similar platform. Triller is one of these, and rumors of a go-public initiative began buzzing and involved SeaChange. We discussed this proposed deal earlier in the month in our article: Best Penny Stocks to Buy Right Now? 3 to Watch as 2021 Ends.
“Currently, there are talks between SeaChange International and the video platform Triller for a potential merger, although nothing has been confirmed.”
Ultimately, the company confirmed the rumors after announcing a definitive agreement and plan of merger with Triller Holdco. According to the company, this deal is expected to result in a combined company valued at roughly $5 billion. No further details of the deal have emerged yet. But, SEAC stock may now be back in focus for a different reason.
Is SEAC A Short Squeeze Penny Stock? According to data from Fintel, the short float percentage on SEAC sits around 13% right now. While it isn’t the highest on the list, it is becoming a point of interest for traders.
Penny Stocks to Buy For Under $5: Applied UV Inc. (NASDAQ: AUVI)
Shares of Applied UV have bounced back from their 2021 lows. The company’s shares took a big hit after announcing a stock offering at a steep discount to the market. Despite the short-term selling pressure, its long-term goals are clear as they’ve earmarked the money to make new investments and acquisitions. This came just a few weeks after some insider trading prompted more interest in the penny stock. The company’s president picked up several thousand shares of AUVI stock at an average price of $4.15.
Read: Trending Penny Stocks to Watch After Holiday Season
What does Applied UV Do? Applied UV’s business has come into focus as virus concerns have recently prompted more market volatility. In Applied’s case, the company isn’t among the vaccine providers. It specializes in technologies that deliver infection control in healthcare, hospitality, commercial, and even municipal markets. Specifically, Applied takes ultraviolet light and uses it for air purification to destroy pathogens.
Is AUVI a Short Squeeze Penny Stock? Fintel data now shows the short float percentage at less than 10%. Given that this is also one of the low float penny stocks to watch, will that play a role in the stock market this week? That would be an excellent question to have an answer for if AUVI is on your list of penny stocks right now.
Final Thoughts On Penny Stocks
Penny stocks are well-known for their wild and sporadic moves. Throw in things like high short interest and lower floats, and there’s potential for compounded volatility to be on the lookout for. It’s essential to understand how this should factor into your trading strategy (if at all). The goal is making money quickly, and short squeeze stocks are one way to do that.
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