Apr 08, 2022 (Penny Stocks via COMTEX) -- Is it easy to find the best or hot penny stocks to buy in the stock market today? If you know what you're doing, the answer is yes, but how can you do it? You could look for trends on social media on places like Twitter or Reddit. You might also try to sift through endless financial statements to find the "most sound" penny stocks with solid earnings growth or high dividends. But it might be even easier than that.
Something that traders have begun focusing on is options volume. Some are looking to find specific activity they'll assume to be "whale activity," with more prominent investors potentially taking bigger "bets" on a stock through options. Today we look at 5 penny stocks with unusual options activity to buy for under $5 in April.
Hot Penny Stocks To Watch
Paysafe Ltd. ( NYSE: PSFE )
Takung Art Co Ltd. ( NYSE: TKAT )
Up Fintech Holdings ( NASDAQ: TIGR )
Nordic American Tankers ( NYSE: NAT )
Aterian Inc. ( NASDAQ: ATER )
Best Penny Stocks To Watch, April 2022
So what exactly is "whale watching" anyway? It has nothing to do with boats, water, or sea-bound mammals in this context. Whale watching in the stock market involves searching for big money bets and unusually large trades. Some traders look for block trades; others search for what we'll discuss today, unusual options activity. For example, if an option typically trades a few contracts per day but suddenly, we see thousands of trade, that would be considered "unusual" activity.
Similarly, if a specific options contract has very little open interest but suddenly sees a higher multiple traded for volume, that could be considered unusual activity. Remember that not all volume is buying volume, so the data can be skewed. However, it is worth noting and another metric to include in your diligence process. With today's list of penny stocks , does this unusual options activity suggest bullish or bearish sentiment in the stock market today?
1. Paysafe Ltd. /zigman2/quotes/221587949/composite PSFE -4.23%
Shares of Paysafe jumped on Friday thanks to several big headlines this week. The payment platform company expanded a partnership with betPARX to provide payments for the betPARX mobile apps in Pennsylvania and New Jersey. Paysafe also appointed a new CEO who will join the company in May. These two announcements seem to have brought some much-needed excitement back to the company's stock this month.
It also seems to have brought some momentum into the PSFE options market. The April 14th Call contracts are the ones in question today. As of this article, nearly double the amount of open interest has traded in the $3.50 strike Call options. In addition, the $4 and $5 strike Calls have the largest open interest of all strikes in the chain. PSFE stock could be on the watch list for traders this month, given the upcoming CEO event.
2. Takung Art Co Ltd. /zigman2/quotes/207015524/composite TKAT +1.75%
Thanks to growing interest in digital assets, non-fungible tokens (NFTs) are increasing in popularity. Traders remain focused on TKAT stock as a speculative bet to play the non-fungible token trend. It was one of the names that initially came up as an NFT penny stock to watch when the trend first emerged. Its involvement in the art industry has helped continue this trend.
Other than putting new management in place, the art and collectibles company hasn't released much news this year. In any case, Takung remains a focus, especially when cryptocurrencies and NFTs build momentum. With the price of Bitcoin up today, TKAT has gained some new interest from options traders. What are they looking at? In particular, the April 14th $5 Calls are in focus. As of this article, more than 2,000 contracts have traded, and current open interest sits at 4,865.