effect of trying to obtain a large position in a penny stock company

Discussion in 'Trading' started by Euler09, Dec 18, 2017.

  1. Euler09

    Euler09

    If you tried to buy in to a large position over a whole of a stock trading on low volume what would be the effect.

    Would the liquidity go down? Would the short term spread increase last? At what point or percentage would you need to consider a tender offer? Is there any way of doing this without it being public knowledge? Etc
     
    Last edited: Dec 18, 2017
  2. Overnight

    Overnight

    I sense a finger-waggling incoming from liquid-hot Magna soon.
     
  3. Euler09

    Euler09

    You can't talk about penny stock?
     
  4. Overnight

    Overnight

    Generally, no. Although I am not sure if that rule applies just to specifically-identified penny stock companies.
     
  5. ajacobson

    ajacobson

    As others have mentioned - 13D reporting, but you can buy as much as you can afford. If it's thin it will be expensive to get in and harder to get out. Consider working with one of the MM/brokers that post markets in the name.
     
  6. Euler09

    Euler09

    Mm that post markets in the name? I know it will be expensive just wonder if a buyer buying up lots of volume over a whole year would make the spread wider and the stock price permanently higher
     
  7. ajacobson

    ajacobson

    Depends on the name and the available float. Is this an actual interest or purely hypothetical. Call one of the MM/brokers and tell them what you have in mind - consider an account with them.
     
  8. I guess you can call this as suicidual investment.
     
  9. Euler09

    Euler09

    Whatever you say supreme noob
     
  10. ironchef

    ironchef

    On thinly traded stocks or options, you will probably move the market. Been there done that.

    You keep buying and the penny stock will keep going up. So on paper you are doing very well, making lots of money. One day you decide that you should take some profit, so you call your broker and tell him to sell some. His answer: Who am I going to sell them to? You are the only one buying.:D
     
    #10     Dec 18, 2017