The coronavirus pandemic has affected the markets dramatically as businesses around the world have faced tremendous difficulties. Everyone, individuals and businesses alike, must now unite in a global effort to stop the spread of the virus in order to save hundreds of thousands if not millions of lives. The effect on the economy has caused a global recession, and the implications for the stock market have been sweeping and devastating. As thousands of equities and indexes plummet, investors are left having to make some hard choices in the face of unprecedented volatility.

Are There Any Positive Implications of Market Volatility?

The modern stock exchange has never seen an event like the coronavirus in history. While the economic consequences of the coronavirus have been devastating for many investors, they have also created unique opportunities for brokerages and individuals who concentrate on trading rather than making long-term investments in equities.

High volatility and wild swings in equities’ value are enabling traders to hop on and off of equities and reap huge gains. However, this is a tactic is typically attempted only by seasoned traders, and it should be approached with great caution by individuals who are more accustomed to traditional investing. Since the end of January of 2020, the VIX has climbed considerably, with no real sign of stopping soon. Until the end of January 2020, the VIX did not get higher than the teens. By the middle of March, it had climbed over 400% to over $80. In turn, the options market has seen explosive contract values due to volatility spikes. Options contracts can easily change hundreds of percent in value as volatility soars and many equities see new 52-week lows.

How Long Will These Effects Last?

While the economic effects of the virus will not last forever, it’s important to consider the possibility that a return to normalcy will not occur soon. Coronavirus market volatility is going to be a reality for the foreseeable future. It may be especially confusing for people to understanding the seriousness and long-lasting effect of the repercussions when they have constantly received misinformation from the highest level of government.

While misinformation has caused spikes in volatility and fear, it has also created false rallies that may give investors mixed signals about when it may be safe to venture back into the water. After the executive branch minimized the seriousness of the pandemic and the Fed declared zero interest rates, the S&P and the Dow rallied for three consecutive days in the fourth week of March. At this point, however, it is not reasonable to expect real changes to occur until significant progress has been made in the development and dissemination of successful vaccines and treatments.

Where is the Opportunity?

Many traders have benefited enormously by pursuing equities that are involved with developing vaccines and treatments for the coronavirus. Penny stocks with relatively small share floats have increased in value as much as ten-fold. While some larger drug companies like MRNA and Gilead are working on promising cures and seeing their share prices rise, smaller-cap biopharmaceutical companies such as IBIO, Aim Therapeutics, and Vaxart among hundreds of others have seen huge spikes in share values and volume.

Companies that make medical supplies such as Allied Healthcare and Alpha Pro Tech and companies that make testing kits such as Aytu and Codex Diagnostics have had incredible runs. These coronavirus stocks are highly volatile. However, when dealt with cautiously and monitored carefully, these types of equities can offer amazing returns.

As always, it’s important for your trading and investing to be backed by comprehensive analysis and research. When you’re up against unprecedented volatility, the best way to protect yourself is to make well-informed and conservative decisions.