This page lists stocks that trade on the NYSE, NASDAQ, AMEX or OTCMKTS exchanges that have had the biggest one-day percentage losses during the current trading session as compared to their previous closing prices. How to profit from top daily stock losers.
Playing the stock market is supposed to be about winners—at least one would think, given all the positive excitement around the upwardly trending securities of Wall Street. But any financial expert worth their salt will tell you there is revenue to be made with the winners and losers of any given stock exchange. In fact, investing in shares of the biggest stock losers can yield big earnings.
What Investors Need to Know to Increase Profits
Leveraging the biggest stock losers for revenue through trading and investing requires an understanding of the market and its motions. Here are some things you’ll want to understand:
As much as investors have groaned through periods of volatility, these turbulent periods have highlighted a simple truth: Supply and demand cause movement in the stock market. This movement is known as volatility. Volatility has a negative connotation, but for investors, it can represent a significant trading opportunity. The very motion of prices as they rise and fall helps to identify stocks that are the biggest winners and the biggest losers on the major indexes. But as we will see, it is important to analyze other financial factors and market data such as trading volume and percentage gain and loss.
What Are Biggest Stock Losers?
Every day, the market gives investors a scorecard that shows the stocks that are up—and the stocks that are down. The winners are called the advancers and the losers are called decliners. The basis of determining which stocks are the biggest advancers or biggest decliners is based on the percent movement in stock price. For the purposes of this article, we're going to focus on the losers or percentage decliners. The securities seeing a substantial decline in price are the biggest stock losers.
As mentioned, percentage decliners are securities that are showing the biggest losses in terms of their percent change over a given time period. Most financial reporting platforms are going to show that data in terms of daily performance (though it could be any time period).
The formula for calculating a percentage loss—in terms of daily performance—is as follows:
(Current stock price – Previous closing price) / Previous closing price = Percentage loss
So, for example, a stock that is currently trading at $25 after a previous day’s close of $28 would be showing a percentage loss of -10.7%.
The calculation would look like this:
(25-28) / 28 or -3/28 = -10.7%
There could be a number of reasons why a stock is seeing a percentage decline. Perhaps a recently released earnings report is showing a drop in revenue. Maybe the company’s business model needs a serious overhaul. Perhaps a rival company has found natural gas near the Gulf of Mexico, or political instability in a foreign country and its currencies have plunged that particular market into chaos.
Whatever the reason may be, a decline in the price of security is inevitable, and it happens to the best of companies every day (even if only by fractions of a penny). A top-notch trader who knows the market will understand why the decline is happening, and how that will influence their investment choices.
If a stock has generally been doing well and is currently seeing a decline in its daily performance, it may be a statistical blip or a somewhat impactful piece of financial news that’s spurring the loss. But if a stock has been in decline for days, weeks, or months, there may be more serious problems going on—and based on other pieces of financial analysis and market data, that may tell investors to either stay away, or to buy it up while the price is low.
Although most commonly used in context with daily movement on the New York Stock Exchange (NYSE), NASDAQ, or S&P 500 Index, as mentioned, percentage decliners can be measured over any time period. For example, many stock screeners will allow you to apply a filter that can show the biggest losers (decliners) for a week or year. In fact, many investors pay close attention to the stocks that show the biggest average decline for the past year, in order to evaluate the stock as a potential buy.
Why Are Percentage Decliners Important?
What comes up, must go down, according to gravity. And when it comes to financial markets, what goes down must come up...unless it goes out of business. This is always a possibility, especially in some startup-heavy industries like biotech and pharmaceuticals—but in most cases, it’s not a serious risk. Companies facing a billion-dollar loss or even bankruptcy can recoup the very next quarter and climb out of their debt. And knowing that these companies will return to the up-and-up is a salivating prospect for intelligent investors.
This is true in both the long-term and short term. A savvy investor with a good sense of market history can see which dependable companies have fallen into hard times, then buy up a large number of shares that will later yield a sweet cash flow as part of their dividend investing strategy. An active trader riding the waves of the market can make short term moves and buy stock in decline at just the right point—then sell it as it climbs back into being one of the stock market gainers for the day.
Identifying percentage decliners is a form of technical analysis that traders use to find stocks with significant price movement. Historically, stocks with the biggest increase in price movement, expressed as a percent, is one of the key metrics for ensuring profitable trades. This movement does not necessarily have to be upward—downward movement could also set the stage for higher profits.
However, because percentage decline only measures price performance at a specific moment in time, investors should look at other metrics such as trading volume to determine which percentage decliners actually make attractive trade targets. This is because—in addition to price movement—investors are looking for active stocks that look attractive in various facets of market data, and that indicate a minimized investment risk. Even if an investor has a high risk tolerance, nobody wants to buy shares of a company that’s going to continue its downward spiral. There is no way to tell one way or the other from price analysis alone.
Many stocks can show significant price movement, whether up or down, but do so with low volume, which can make it difficult to enter and exit a trade. An eager trader may see stock prices falling, but if trading volume has been low over the last few weeks, it may indicate that the trend will continue. With a low amount of liquidity to enter and exit trades, they will be stuck with a security that continues to decline in price, until it becomes a loss.
While this might not be such a problem with large cap, big-name companies operating at higher trading volumes, it can certainly be a concern with some of the most volatile stocks. This is one of the many reasons the securities and exchange commission has placed limits and requirements on day trading activities: to protect inexperienced retail investors.
Stocks, and other securities, seeing a decline in terms of percentage are expressing just one measure of volatility. Although volatility can have a negative connotation, it is necessary for profitable trading. When comparing two securities, the one that posts a greater percentage loss is considered to be the more volatile security. For example, a stock that drops $5 from its previous closing price of $30 day (-16.7% loss), is more volatile than a stock that drops $5 from a previous close of $80 (-6.2% decline).
However, just because a stock is one of the biggest losers does not necessarily mean it is a profitable trading option. In order for a percentage decliner to be profitable, it needs to show a significant active trading volume. Sufficient volume is what allows trades to be entered and exited easily and at a price that makes sense for the trader. For example, some of the largest percentage decliners on a daily basis are obscure penny stocks. Though these are cheap stocks to buy and can show massive percentage gains, they may be trading on a very small volume—which can make too difficult to exit the trade at the right time.
How to Find Biggest Stock Losers
The easiest way to find the biggest stock losers is to look at financial news sources that offer screening tools and display that information on their site. Though it’s definitely not everything, a stock’s price is probably the most evident and popularly analyzed piece of market data regarding its health and performance, so percentage gain or loss is a highly noticeable statistic that’s often discussed.
A stock screening tool (which can be found on most financial websites, including MarketBeat.com) has a series of drop-down menus that sorts stocks by specific groups including the stock exchange they are traded on (New York Stock Exchange, NASDAQ, S&P 500, Hang Seng, etc.), their market capitalization (e.g. small-cap, mid cap, large cap), price, or volume.
Most menus will even allow sorting to be done by sector. This means, for example, if an investor is only interested in viewing small-cap technology stocks or large-cap consumer staples stocks with a trading volume of over 500,000 they can do that. Investors can also leverage platforms that allow them to build a list of stocks adhering to other metrics, such as stocks under $1 in terms of current price. If they like investing in specific industries like tech, real estate, defense, or consumer staples, they can create their own customized dashboard as well.
At times, stocks and futures will see significant movement after the close of a trading day. As it relates to traders in search of the biggest percentage decliners, some traders will pay close attention to pre-market and after-hours trading because this is when companies engage in activities such as reporting quarterly earnings which can move a stock in either direction. Others will only pay attention to one of the two periods outside of normal market hours. Either way, traders are only concerned about looking for stocks that meet their criteria for both percentage gain and trading volume during a defined window when they are looking to execute their trade, whether that trade is between normal business hours, or at 8:00 PM.
Informed investors love market data because it helps them identify potential trends. One of the key data points they use is the market’s daily advancers and decliners, which are also known as percentage gainers and percentage losers. While some of these winners and losers might be a shooting star, others have been in motion for weeks or months, and may also be on a running list of the best growth stocks.
When decliners lead advancers, it indicates a negative day for the stock market. However, one limitation of percentage decliners is that, because they only indicate a moment in time, they are not always an accurate predictor of the market’s overall direction. In volatile markets, it’s not uncommon to have consecutive days where decliners lead advancers yet the market as a whole could still reflect strong underlying economic growth. That said, investors looking for stocks that are truly in decline might want to take a look at a longer time-span in terms of loss, perhaps a few weeks, to separate a security from overall market trends and see if its price decline is a unique factor or tied to market performance.
As previously mentioned, to calculate percentage loss, the formula is:
(Current stock price – Previous closing price) / Previous closing price = Percentage loss or gain
So a stock that closed at $39 on Monday and was trading at $34 the next day would show a percentage loss as follows:
(34-39) / 39 or -5 / 39 = -12.8%
Again, percentage decliners do not factor in trading volume. And although percentage decliners are typically associated with stocks, investors can track the biggest percentage decliners for almost any asset including things like the price of natural gas, oil prices, or currencies. Many stock screeners allow investors to track the biggest gainers and losers on specific stock indexes including overnight markets.
Limitations of the Biggest Stock Losers
As we’ve pointed out in this article, percentage decliners are not a standalone measurement of a profitable trading opportunity. A stock or security must have both price movement and a high volume traded to be considered a good opportunity. Percentage decliners also tend to be growth stocks, which is logical since mature stocks, such as blue-chip stocks, are known for being able to maintain more stable prices even during times of volatility. These growth stocks, which are sometimes some of the most active stocks, can be a more risky investment because of the untested nature of their business or their lack of an established history.
Another limitation of percentage decliners is that the decline is noted without context. Simply understanding how much a stock is declining does not tell an investor why its shares fell. This is why investors need to continue to do other research on the stock to understand all the factors influencing the stock.
While day traders tend to focus more on leveraging mathematical performance, long-term investors are more interested in financial information about a company such as its earnings and business model. Percentage loss and gain may be of less interest to such an investor, who cares more about whether or not fundamental analysis of the company portrays a long-term successful future.
According to another financial train of thought, the “efficient stock market theory,” everything about a stock is already factored into its price. Therefore, the idea of investors chasing a return (i.e. jumping on the biggest gainers or selling the biggest decliners) shouldn’t work. And over the long run, that’s probably true, at least according to investors who favor fundamental analysis. However, short-term traders often can make a profit by capitalizing on the trend of securities. When they’re up, they can ride the trend higher and when they’re down, they can profit through shorting the stock.
The idea of “buying high and selling low” is not limited to active traders. In a 2002 study titled Prospect Theory: An Analysis of Decision Under Risk, psychologist Daniel Kahneman developed the concept of “loss aversion,” whereby investors feel more pain from their market losers than they do pleasure from their market gainers.
Kahneman and his long-time collaborator Amos Tversky also developed the theory that when making decisions, individuals tend to allow the most recent data they receive, which has a disproportionate effect on their forecasts and judgments. This challenges the theory of an efficient market because it spawns the “herd mentality,” where buyers will bid up stocks that are showing the highest gains and selling the ones that are showing the largest declines—essentially creating a self-fulfilling prophecy of success or failure.
However, this is where conventional market dynamics can get thrown out the window. That's because along with the role of supply and demand, markets are also driven by the psychology of investors, and that’s a fairly unavoidable fact in a public market where retail investors are granted access to participate through buying and selling securities based on their sentiments. These investors tend to buy the biggest winners and sell the biggest losers, which again can generate the self-fulfilling prophecy of loss or gain, sometimes at cataclysmic proportions like the stock market crash of almost a century ago in 1929.
How to Profit from Percentage Decliners
Of course, there is still a sound rationale for buying low and selling high. After all, that’s basically the business model for financial success in every industry, whether it’s real estate or stocks. In fact, for long-term, "buy and hold" investors, this is still the unmatched formula for success. In today's market that requires investors to be a bit contrarian at times. A contrarian is able to use fundamental and technical analysis to purchase stocks that have fallen out of favor, then selling them for a profit as they rebound. Investors that look to profit from “buying on the dips” are using a technical analysis concept known as mean reversion.
Mean reversion is rooted in behavioral psychology. Everything from weather to human emotions can have periods that exhibit extreme behavior. For the most part, however, this behavior is simply not sustainable. Temperatures and precipitation go back to normal levels and even the most active life will go through a return to a more manageable schedule.
Suggesting a stock (or other security) will revert to the mean indicates that a stock will try to find a steady range to trade in. When events arise such as a negative earnings report, declining quarterly sales, a product recall, or job cuts, the stock will move out of its steady range, and—like a rubber band—be stretched to an extreme level. In the case of negative events, that means the pressure will move the stock price lower. However, when stocks get the most stretched, they will tend to snap back to the steady state. This is what contrarian investors are counting on: this reversal of prices.
While buying stocks that are among the biggest decliners can be profitable, there are times when the stock will continue to underperform. Therefore, another way to profit from percentage decliners is by shorting the stock. Short selling is a riskier form of investment often because it requires investors having a leveraged portfolio. This means that they use borrowed money, in the form of a margin account at a brokerage, to “sell” the stock without owning it. If their analysis is correct and the stock continues to fall, they can purchase the stock at a lower price and make a profit from the difference.
Of course, as mentioned, short term day traders don’t care about all this psychology and fundamental analysis (for the most part) and are just simply riding out waves of numbers and making choices based on math. Some of them have even developed proprietary number-crunching programs for predicting future movements or a stock price based on thorough analysis of its previous movements. For these traders, the biggest stock losers can play into their strategy of making a profit by buying low and selling high, to the best of their ability.
Biggest Stock Losers
People who think about financial success on Wall Street can’t get the image of an upwardly moving graphed line out of their mind. The idea of a stock price bouncing up and down connotes instability, and a downward moving line can initiate sheer panic. But a deeper analysis of the biggest stock losers has hopefully made you realize that these percentage decliners actually offer huge opportunities for financial gain if played right.
Of course, that plays into the foundational rule about stock-picking and investments in general. They have to be analyzed rationally, leaving feelings at the door. Intuition based on experience and analysis is a different bird, but unfounded gut reactions—especially those formed after digesting information confirmed or driven by a herd mentality—can be detrimental. To that end, every investor looking to improve their financial knowledge and investment decision making should seriously consider the power of the biggest stock losers or percentage decliners.
Percentage decliners offer important data for traders who are looking to profit from the price action of volatile stocks and futures. A percentage decliner is a stock that has seen its price fall the most as a percent in relation to its previous closing price. The formula for percentage loss or gain is the difference between a stock’s current price and its previous closing price, which is then divided by the previous closing price.
Because the market is not static, percentage decliners continue to change even in after-hours or pre-market trading. In fact, many traders use these periods to identify securities that are setting up for profitable trades.
Like many forms of technical analysis, performance decliners need to be evaluated along with other market data such as trading volume in order to determine the securities that have the best trading possibilities. A stock that has a share price of $20 will be able to make a large percentage move on less volume than a stock trading at $100. However, for a trader that is looking to enter and exit a trade quickly, they may find it difficult to trade at the price they want if the stock is trading at low volume, which signals low demand for the stock. The biggest losers on Wall Street are only profitable if you can get rid of them at the right time, or if they have a future of financial success. No one wants to be stuck with a big stock loser forever.
While commonly thought of in terms of stocks, investors can find performance decliners for virtually any asset class including commodities and futures. Many stock screening tools allow investors to get very precise—even allowing them to look at gainers by sectors or by volume. In this way, traders can customize the data to fit the criteria that they find most beneficial.
Trading percentage decliners fit the traditional notion of buying low and selling high because of the theory that most stocks—similar to weather patterns and life events—will seek to find a stable state. That’s why buying stocks that show the biggest declines are often the ones with the biggest upside potential.
