Enjoy the Holiday!

What Are They and Can You Profit?

‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  Good Morning! Two of the biggest gainers in the market yesterday were both running on the same news…    ShiftPixy, Inc. (NASDAQ: PIXY) gained up to 217% and SciSparc Ltd. (NASDAQ: SPRC) gained 134% on news that the companies were doing reverse stock splits.    Judging by the price action and jump in their stock prices, you might think this is good news… But this news doesn't change anything about the company.    It's not like another news catalyst like good earnings, or news of a new drug passing trials. So why are these stocks having such huge gains?    I'll explain below and share how I prefer to trade reverse stock splits… Understanding Reverse Splits Most reverse splits occur in stocks listed on the NASDAQ exchange.    That's because the NASDAQ requires listed stocks to maintain a share price of $1 or more to stay listed on their exchange.    This rule pushes companies trading below $1 to perform reverse splits to avoid getting kicked down to the Over-The-Counter (OTC) markets.    Here's how they work…   The Mechanics of Reverse Splits   Reverse stock splits aim to increase the stock price without altering the company's market capitalization. Market capitalization represents the total value of a company.   For example, if a $1 stock has one million shares outstanding, its market cap is $1 million.    If they decide to do a 10-for-one reverse split, the number of outstanding shares drops to 100,000, and the stock's price jumps to $10.    But here's the key: the market cap remains $1 million.    In essence, it's a paper shuffle that doesn't change the company's value, it just changes the number of shares available and the price. Trading Opportunities with Reverse Splits The recent rise in stock prices like PIXY and SPRC yesterday shows you can profit from news that a company is doing a reverse stock split.    But is it a good edge and strategy?    Axcella Health Inc. (NASDAQ: AXLA) recently announced it was doing a reverse stock split…    And the stock plummeted after climbing for weeks on news of its long COVID treatment.  AXLA chart: 3-month, daily candle — courtesy of StocksToTrade.com So while some stocks might spike on the news, I prefer a different approach to trading reverse splits…    How I Approach Reverse Stock Splits   The way I prefer to play them is to wait for the company to complete the reverse split, then I like to look for a news catalyst.    After a stock does a reverse split it has a low float, and a news catalyst can bring in buyers and send it soaring.    Buying a stock before it does a reverse split makes no sense to me…    Most traders think they'll make money when the split completes. But the value of your position doesn't change. Just the price of each share and the number of shares you own changes.    I hope this clears up some of the misconceptions about reverse stock splits.    And using my strategy for reverse stocks splits means PIXY and SPRC could be on watch over the next few weeks for company news.    Since good news that relates to a company's actual business has more potential to spike a stock — especially once it has a low float.    That's just my approach. You can do what you want.    But if you want to approach trading like a business and as a professional, you have to learn why companies do things like reverse splits.    And you have to stack the odds in your favor for any trading plan you make.    I can help you during my live training sessions — StocksToTrade has a whole team of presenters showing you how to find hot stocks, make watchlists and trade plans, and execute using top tech tools.    Sign up to join one for free today!    Have a great day everyone. See you back here tomorrow.    Tim Bohen Lead Trainer, StocksToTrade sponsored Who Knew a Simple Code Could Produce Such Massive Gains Who knew a simple 64-digit code like this… Could generate gains like this… Just in the last few months, that simple code produced a 93.33% win rate with an average gain of 49.03%…   So if you're looking for new ways to potentially accelerate your trading account's growth (no matter how small it is)… Drop what you're doing right now and watch Matt's LIVE demo before it gets taken down. sponsored This "Loophole" Is So Powerful There's a renegade day trader who discovered a powerful "weekend loophole" in the stock market.   It allows him to place trades on Friday afternoon…   And open up his laptop on Monday to potential green.   He's used this "loophole" to make $8,780, $9,177, and even $69,962 all over the weekend.   And he claims with the right amount of hard work and dedication, ANYONE can learn how to use it too… Click here to discover how he does it   sponsored ACCESS NOW: Click to activate these complimentary membership gifts and receive daily market intel. To The Moon Report Weekly Stock & Crypto Watchlist Mark Croock Evolved Trader Daily Recommended Membership Gifts Click Here to Unsubscribe   (As an Amazon Associate, we earn from qualifying purchases.)   13809 Research Boulevard, Suite 500, Austin, TX 78750   **Tim Bohen teaches skills others have used to make money. Any results displayed are extraordinary and are not typical and will vary from person to person. For more info read our Earning Claims Disclosure   About: Making money trading stocks takes time, dedication, and hard work. My goal is to teach you how I have succeeded in the market, but you may not achieve my results. Remember, there are risks involved with investing, including the potential loss of money.   We are strongly committed to protecting your privacy and providing a safe & high-quality online experience for all of our visitors. We understand that you care about how the information you provide to us is used and shared. 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