The Largest Single-Day Stock Gain Ever Recorded (And What Happened Next)

"Huge single-day stock gains are rare and thrilling. It's not unusual for stock traders to fantasize about participating in lightning-fast profits, and moonshot lore never ceases to fascinate investors. On the other hand, stocks can go down just as fast as they went up and moonshot tales don't always have happy endings. Still, it's fun to think about gigantic one-day stock runners and in the end, there may be some important lessons to consider."

"An Unusual Time for a Melt-Up Imagine, if you will, that it's October of 2008 again. Stock markets in the U.S., Europe, and elsewhere are melting down, not up. Could the biggest single-day stock rally occur during this time? It is possible, under a specific set of circumstances. After all, when stocks get volatile, big swings can happen in both directions."

Huge single-day stock moves are rare and driven by extreme volatility and positioning. The largest recorded single-day gain for a recognizable, long-lived company occurred in October 2008 amid global market selloffs. Volkswagen shares faced heavy short interest as the automotive industry struggled. Porsche disclosed plans to increase its stake in Volkswagen to 75% after accumulating shares since 2005 and previously holding 35%. The disclosure created a massive short squeeze that forced shorted traders to cover, producing the record one-day rally. Concentrated ownership and surprise disclosures can trigger dramatic price reversals and substantial investor risk.

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