Saturday, August 13, 2011

Difficult to buy cover when stock drops significantly?

A $2,000 trade (10,000 shares at $0.20) is not going to move a stock price if there is any liquidity at all in the stock. With an average daily volume of 2,000,000 shares you are talking about a stock where about $11,000,000 was trading hands every day when the stock was at $5.50. The odds of liquidity drying up so quickly that you would have difficulty covering are too low to worry about.

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