Best Covid-19 Stocks for Day Trading [2020 Update]

The coronavirus pandemic has had serious implications in the market. In March, when the World Health Organisation (WHO) declared it a pandemic, global stocks dropped to multi-year lows. In the same period, the dollar and the CBOE volatility index rose, as shown below.

Later on, stocks recovered and the dollar and the VIX index retreated. In this report, we will look at the best Covid stocks for day traders.

Moderna

Founded in 2010, Moderna is a biotechnology company that researches and discovers new drugs. The firm launched its IPO in 2018 and at a valuation of more than $4.3 billion. The firm priced its IPO at $23 a share.

Today, the company has emerged as the leading players in the discovery of a coronavirus vaccine. That has seen its stock soar to a YTD high of $65. As of this writing, it is up by more than 250% this year, making it one of the best-performing stocks in the world. It now has a market cap of more than $26 billion.

Why Moderna is a good choice?

There are two main reasons why Moderna is an ideal company to trade during the covid-19 pandemic. First, it is a relatively young company, and one that is actively traded. Second, the company’s stock has been relatively volatile because of the new news on the virus.

Virtu Finance

Virtu Finance is a finance firm started in 2008, during the financial crisis. The company provides market-making products to Wall Street traders. It is a recognized brand that is also one of the biggest execution, workflow, liquidity sourcing, and trading analytics firm.

The firm generates more than $1.8 billion in annual revenue and is valued at more than $5.2 billion.

Virtu is a unique firm in that it makes most of its money in times of high volatility. Subsequently, the stock has been relatively volatile this year. It rose from below $15 per share in January, reached a high of $26.5 in March and dropped to $17. As of this writing, the stock is at an $27, a few points below its all-time high of $28.50.

The chart below shows how the stock has performed this year together with its historical volatility indicator.

Novavax

Up by more than 2250% this year alone, Novavax is one of the best-performing companies in the US. The company, which was previously a penny stock, is now valued at more than $6 billion. That is a hefty valuation considering that it had just $18 million in annual revenue last year.

In addition to the COVID vaccine, it is also developing vaccines on seasonal influenza, Ebola, and Severe Acute Respiratory Syndrome (SARS). Also, it is developing a COVID antigen in collaboration with The Serum Institute.

With the stock’s parabolic move, it has attracted many retail traders, which has led to increased volume. Also, short interest has grown among many fundamental investors.

Why Novavax

There are several reasons why trading in Novavax makes sense. First, because of the dislocation of its earnings and market value, it is one of the most volatile. You can see this using the Average True Range below.

Second, the coronavirus vaccine is what most buyers are betting on. Therefore, if it fails, we could see a lot of volatility. If it succeeds, it could be a rebirth of a previous fallen angel.

The chart below shows how the firm’s stock has traded this year.

Gilead Pharmaceuticals

Pharmaceutical companies have been among the most volatile companies during the pandemic. That is because they are at the forefront of developing a vaccine that could be useful to curb the disease.

Gilead was among the first companies to come up with a drug that helped coronavirus patients. The drug is known as remdesivir. At the same time, the company has been deal-making.

It recently announced its decision to acquire a company known as Immunomedics in a deal valued at more than $21 billion. As a result, the firm’s shares have been relatively volatile as shown below.

Other pharmaceutical companies involved in the vaccine development are Pfizer and AstraZeneca.

Pfizer

Started in 1850, Pfizer is one of the oldest companies in the world. It is also one of the most valuable. The company has a market cap of more than $228 billion and annual revenue of more than $21 billion.

The firm manufacturers tens of products, with Prevnar, Ibrance, and Lyrica being its best-sellers. It is also a well-known dividend aristocrat that was recently removed from the prestigious Dow Jones index.

Pfizer is one of the firms that is developing the coronavirus vaccine. It is doing so in collaboration with BioNTech, a German biopharmaceutical company. In recent days, the company’s stock has been relatively volatile after the CEO hinted that its vaccine will stat being used by the end of the year.

It is currently conducting a trial of this vaccine with more than 44,000 participants. The claim of the virus being developed by the end of the year has been questioned by many industry experts.

Relatively Cheap

Pfizer is an excellent COVID stock to trade for several reasons. First, its stock price per share is about $37, which is relatively cheap now that retail traders are among the most active in the market. It is also a relatively volatile stock as you can see below.

High Volatility

Second, while the firm has made strong progress on the vaccine, it is still early to tell whether it will work, which means a likelihood of more volatility.

Warning: expiring patents

Separately, there are concerns about its future profitability considering that most of its important patents are about to expire.

Roku

Roku is one of the most volatile technology names, which makes it an ideal Covid-19 stock for day trading. Started in 2002, the company provides digital media players that enable people stream content on television. The company makes money by selling the streaming device and advertisements.

The company had more than $1.3 billion in revenue in 2019 and is now valued at more than $20 billion. This year, the stock has climbed by more than 20% as more people stay at home.

Who Will Win in the Streaming War?

Roku is a great Covid-19 stock to trade for two reasons. First, Roku has always been a volatile stock and the pandemic has made it more volatile. Second, analysts are not sure what to expect with Roku as more people watch but as companies slash their advertising budgets.

The chart below shows Roku’s performance this year together with its historic volatility.

Slack

Slack is a communication and collaboration company started in 2009. The company provides tools that help companies accelerate their workflow. It is used by more than 12 million customers every day, making it one of the biggest communication firms.

The firm is also valued at more than $14 billion and has been a key beneficiary for the work-at-home industry.

Indeed, like Zoom Communications, most of the firm’s growth has happened during the pandemic. Therefore, as a trader, focusing on relatively young companies like Slack can help you make more money.

As shown below, the shares have been relatively volatile during the pandemic.

In addition to these five, other notable companies that are ideal for trading during the pandemic are Tesla, Zoom Video, Peloton, and CrowdStrike among others.

Final thoughts

The coronavirus pandemic has led to a lot of disruptions and deaths around the world. It has also created vital opportunities for traders from around the world. Indeed, many traders have made most of their money during the period.

For example, in the most recent earnings calls, most banks announced that they made billions of dollars from their trading operations. Looking at companies that are developing the vaccine and other fast-growing stay-at-home brands like Zoom and Slack can help you benefit from the volatility.

External Useful Resources

  • Fears of another Covid-19 wave send stocks tumbling – CNN
  • A COVID-19 vaccine will mark a ‘big top’ for the stock market – Businessinsider
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