hello guys steven dux here welcome to this new youtube videos and today we're going to focus on the strategy that was producing uh for the entire decembers and for the last two weeks we're pretty much playing with ipo related stocks so today i have summarized three things you guys can focus on uh when you are trading this type of ipo related stocks so before i start this video make sure to click the like button and subscribe let's get into today's content so the first thing you want to remember is ipo is called initial public offering
and it's basically the first day that stocks appear in the stock market and you will have its own float brand new market cap a lot of people are trying to get into the stocks in the first day so it makes the first green day untreatable pretty much throughout the entire day so let's look at the tickers called wnw that happened the last week pretty much all tickers have high volume low flow it's going to behave very similar to wnw let's try to look at the entire action and to see what we can learn from it
so wnw uh initial public offering has started around seven and so right now the price for w w is 75 normally to calculate the initial market cap i will use how much it gained from seven so again over a thousand percent and we're using uh the overall market cap and 75 dollar divided by 10 because it gained 10 times over then seven so uh initial market cap we can calculate from 1.88 billion divided by 10 that's around 188 million in terms of initial market cap so once we calculated uh the initial market cap will be
188 million and the flow is under 20 million so it's considered a low flow the amount of volume we've been getting i will get into that into the second point so let's look at the first green day as i said a lot of people trying to get in pretty much make it untreatable shares are not available some shares were available by the late of the day that's because the stock is brand new so there's not enough supply out there for you to really get it except your hedge fund on the second green day this is
a really tricky part the stock dropped in the pre-market and they force the stock to go into short sale restriction so basically it makes it much harder to short and also brings tons of trap for short sellers to fall in so uh the first resistance that was considered to be a pre-market resistance it was around 1.05 and i do see a lot of people trying to use 105 as risk to short into the stock but let's reverse back to the point i want to make about volume so when you are trying to read ipo volume
you have to read in terms of volume times the average price it's because during the normal market conditions that the stock can go up to 65 a share or 85 a share is very difficult is because the stock is way too expensive for normal investors to buy so in this case we're using the small volume times the average price to calculate how much actual dollar was being traded into this taker so let's look at the five-day chart whenever you are looking at ipo stocks there's no historical chart and it's pretty much only two or in
terms of historical chart so we want to look at december 17th we traded around three million shares and the consolidation is anywhere between 120 to 140. so let's pick the middle of the consolidation let's use 120 120 times 3 million you traded overall 360 million in terms of amount of dollar that was traded in that day the third point i want to point it out is once you know how much dollar was traded in that day you will know that if the volume is actually sufficient or not because if the stock trades over 300 million
in one day then the stock itself becomes shortable in terms of liquidity and you don't have to worry about you can't really exit and your size is going to affect the stock price so the total three point will be uh try not to trade on the first green day because there is a lot of volatility hope second i will be make sure to spot the correct market cap and float and the third one was the stock proof itself that is tradable uh make sure focus on your risk reward it is very important because the maximum
reward normally lands from 50 to 75 maximum so that will be of the three points i want to cover today make sure leave a question below i understand that the third point is a little bit confusing so if you have any questions uh make sure to leave a comment below i will see you guys in the next one [Music] [Music] you
