Playing Stock Volatility in Rambus Shares

Rambus Inc. (RMBS) is definitely a stock worth watching.

The past few days, and for most of August, the major market averages have grounded to a halt, challenging investors to find volatile stocks that could potentially provide some high returns. Although the market indexes have gone up, their gradual ascent has not created so one would have to look elsewhere for better investment ideas.

Coming across shares of Rambus, it is important to note that this stock has a beta of over 6, surely not for faint of the heart investors, but providing rapid movement for traders. According to Investopedia, volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. Beta is a good measure of the relative volatility of a particular stock and the higher the beta, the more reactive a stock might be to the upside or downside.

With the broader averages looking to breakout, investors could benefit from amplified movement in Rambus stock (especially after the U.S. court stayed the Hynix trial).

RMBS 1-yr chart: