What are the most volatile stocks in the UK?

Volatile stocks are favoured by traders as they provide the ability to profit over a shorter time frame. But these stocks do come with increased risks. Let’s take a look at the most volatile stocks in the UK – including on the FTSE 100 and FTSE 250 – and what creates these price moves.

What are highly volatile stocks?

Highly volatile stocks are those that experience rapid price fluctuations in a relatively short period of time – hitting higher highs or lower lows. Conversely, if a stock price moves more slowly or in a more stable trend, it would be said to be a low-volatility stock.

Volatility measures the price variation of a financial instrument over a given period of time. The higher the range of movement, the higher the volatility – this is usually displayed as a percentage.

Measuring volatility alone doesn’t show whether the price change was positive or negative, it just tells us which stocks have had the widest range of price movement over a given timeframe.

For day traders, the greater the volatility, the greater the reward and risk.

How to find the most volatile stocks

The best way of finding the most volatile stocks is to use a stock screener, like the one offered by TradingView. All you need to do is add your chosen filters and timeframe.

For example, a month timeframe was selected and applied only to UK companies to gather the data used in this article. The dataset was then ranked by volatility as a percentage range. To get the specific index sets, a second filter was added for the FTSE 100 (UK 100), and later the FTSE 250 (CBOE UK 250).

You can connect your City Index account to TradingView to access their full range of tools and advanced charting package.

FTSE 100 most volatile stocks

The FTSE 100 is comprised of the 100 most capitalised companies on the London Stock Exchange. Their share prices tend to be less volatile than other parts of the UK market, given that large-cap stocks are considered more stable businesses.

Here are the ten most volatile shares on the FTSE 100 for the month ended August 29^th. You can see the most recent volatility data on the TradingView stock screener.

Let’s take a look at a few of the reasons each of these companies has been experiencing higher volatility, as examples of what can impact share prices.

JD Sports Fashion (JD)

Despite a stellar record of sales and revenue, there have also been concerns over JD Sports Fashion’s ability to maintain these levels given big brands – such as Nike – have started prioritising a direct-to-consumer strategy.

JD Sports shares were hit by news that Dick’s Sporting Goods – a US competitor – had announced a profit warning. The company blamed ‘shrink’, the term for missing merchandise due to theft, fraud and damages, for the performance.

This may have caused volatility for JD given that it also made headlines in the last month as it was the target of mass thefts by youths in London who had mobilised on TikTok to raid the Oxford Street store

Anglo American

Shares of mining giant Anglo American have been trading lower over August as it reported a 13% drop in revenue for the first half of the year due to falling prices and increased costs.

Production volumes did increase, offsetting some of the concerns, and Anglo American still proposed a dividend in line with its ‘40% of profits’ policy.

Prices of key commodities have fallen across the board this year, so it's unsurprising that the miner is facing volatility. The company is diversifying its approach between industrial commodities and consumer commodities – such as its DeBeers diamonds – so these fears could be reduced in the future.

Taylor Wimpey

Over the years, the rapid and sustained increase in house prices has driven the bottom line of the homebuilder Taylor Wimpey, granting investors a significant return on capital.

However, amid economic uncertainty, the housing market naturally cools off as both buyers and sellers become more risk-averse. So, to see a homebuilders such as TW’s share price experience a slowdown isn’t unexpected. The fear of house prices plummeting is what’s toned back investor sentiment here and created some volatility in the share price.

But with an increase in government funding on the way to boost the supply of homes, Taylor Wimpey is well-positioned to benefit.  

Ocado

The shares of supermarkets are usually among investors’ favourites during periods of economic uncertainty, as they’re seen as a defensive play given the essential nature of the businesses. Ocado however, doesn’t necessarily fall into this category, which means its share price has experienced volatility – rather than the stable growth you’d expect from a defensive stock.

This is largely caused by the company’s fundamentals disappointing. Ocado Group is not profitable. This in itself isn’t the problem, as shareholders of high-growth companies are usually prepared to forgo profits if revenue is growing steadily. But currently, Ocado’s revenues only see a 6% growth per year, which has caused the company to drop out of favour with investors.

But Ocado shares have also been through quite the short squeeze recently, aiding volatility. As the sour view on the firm became widespread, investors started buying back its shares to push the share price higher.  

FTSE 250 most volatile stocks

The FTSE 250 is the next most highly-capitalised stock index on the London Stock Exchange once the 100 from the FTSE 100 have been taken out of consideration. These companies’ share prices tend to experience greater volatility as the businesses are smaller and seen as less stable.

Smaller and mid-cap companies also have less trade volume, which means that each trade can create a larger movement in the share price when compared with large-cap stocks.

Here are the ten most volatile shares on the FTSE 250 for the month ended August 29^th. You can see the most recent volatility data on the TradingView stock screener.

Most volatile stocks UK

A lot of the most volatile stocks in the UK overall are small-cap stocks, which experience far greater price movements due to the comparatively low trading volume.

Here are the ten most volatile shares in the UK for the month ended August 29^th. You can see the most recent volatility data on the TradingView stock screener.

Why trade on stock market volatility?

Stock market volatility is part and parcel of the cycle, so regardless of whether you’re looking for opportunities in the market movements, it’s important to be aware of how it can impact positions.

Some longer-term traders will avoid opening positions in periods of volatility, fearful of the losses that such dramatic swings in price can cause. Instead, they open positions in more stable periods, when they can take a more measured and calm approach to their trades.

However, some traders and investors look to stock market volatility to find more advantageous entry and exit points. Swing lows can create a cheaper entry point for long positions, while swing highs can create a better entry for a short trade.

If you’re looking to take a position amid market volatility, it’s vital to take an active attitude toward your risk. Managing the potential loss with stops and limits is a popular way of entering volatile markets with the assurance that both your gains and risks are controlled.

Are volatile stocks good for day trading?

Volatile stocks are preferred by day traders, who are looking to enter and exit positions over a much shorter period of time. Without volatility, the price movements wouldn’t be enough to ensure a profit in such a short window. So, you’ll often find day traders filtering stocks by percentage change to find the best opportunities for that day.

How to measure a stock’s volatility

Stock market volatility is measured using beta, which looks at an individual company’s share price relative to the overall market. The stock is ranked against the benchmark to see how far it deviates from the average.

For example, the S&P 500 is assigned a beta of 1.0, so stocks with a beta higher than 1.0 would be considered volatile, and stocks with a beta lower than 1.0 would be less volatile.

How to trade stock volatility

Start trading stocks whether they're rising or falling in price with City Index. Follow these steps to get started:

1. Open a City Index account, or log in if you’re already a customer
2. Search for the company you want to trade in our award-winning platform
3. Choose your position and size, and your stop and limit levels
4. Place the trade

Alternatively, you can practise trading stock volatility in a risk-free environment with a demo account.