Negative Beta Stocks

opposite direction for $GME while we finished at 14 dollars above the close we saw highs of
about 204 with this particular stock. So this correlation tends to fluctuate all day depending
upon how our overall median market score goes up or down.
This is important to not as we get into a market that may not perform the way we want it to. So
what are the 7 Key takeaways:
1. Beta is another way for valuing risk in the options market.
2. Beta helps us understand how the underlying stock moves in tandem with the market
median or the S&P 500.
3. Beta helps us to figure out in the short term how risky a stock price might be and how it
would affect our portfolio.
4. Negative Beta moves in the opposite direction of the market. So If the market dives it
also moves in that direction. Now if the market tends to stay the same with less
movement we’ll also see that same change.
5. Negative beta stocks are risky in that when the overall market is doing well this tend to
lose more than the risk free rate.
6. When a negative beta stock is added to a portfolio is usually done to hedge other risk
within the market.
7. You can find it within your trading platform. Keep in mind that each platform may
calculate this amount differently so if you want the formula I can add it here but just
know that it’s there and I will do my best to post the updated beta information for these
stocks.
There is so much more to discuss about beta but I wanted you all to have this before we move
into tomorrow. Part 2 is coming and It will cover something new that occurred today. Part 3
Dark Pools. I will have to wait to post that after a meeting in the am as there is no time to do
that tonight and it to the post. Share what you know and I hope that helps. Explain what
negative beta stocks are, how they move with the market, and why many us hold beta stocks if
you have both AMC and GME.
Additionally, if you’re wondering why AMC didn’t move very much in the positive spectrum I
offer you this. According to Fidelity AMC has a better of -0.27 so that means for every 1%
change in the overall market median AMC will move 0.0027% of it’s price ratio. Some quick and
dirty math will show that we only moved about 0.5% from the overall total as the separation
from the market took place. Not bad but still has some improvement and ways to go in order
for AMC to take advantage of the overall downturn of the market.
I honestly hope this will help each of you understand the concept. If you have any questions.
Please post them and I’ll get to them as soon as I can. Take care all and part 2 on the news that
occurred today is coming next.