What are the common reasons a stock is flagged by surveillance?

Exchanges look at a combination of factors when deciding to flag a stock. The most common reasons are:

Unusual price movement – The stock price rises or falls sharply over a short period with no news, results, or business development to explain it
High trading volume without reason – A sudden spike in the number of shares being bought and sold, especially in stocks that are normally low-volume
Price-to-earnings mismatch – The stock is trading at a price that makes no sense relative to the company’s actual financial performance
Concentrated trading – A small number of people or entities are responsible for most of the trading activity in the stock
Low float with high volatility – The company has very few shares available for public trading, making it easy to manipulate the price
Weak fundamentals – The company has poor financials but the stock is trading at unusually high levels

Any one of these factors, or a combination of them, can trigger the exchange to place a stock under surveillance.

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