Jump to content

Penny stock with huge volume, manipulation?


hillfronter83
 Share

Recommended Posts

I was looking into penny stocks as short target.

 

One thing I saw repeatedly is that some short stock would pop on huge volume. For example, DDAY is a company that losing tons of money and for last a couple of days, price popped up over 30% on volume 10 times normal day. I suspect insiders are manipulating the stock price since who would want to buy such stock at such amount? But I'm not an expert of trading mechanics. Can someone shed some lights on this?

Link to comment
Share on other sites

I shorted a mining stock into bankruptcy and left the position open only to find out IB charged me short interest at rate times $1 (they round price of all penny stocks UP to $1). So i was paying an exorbitant rate every month (more than the position mark). This makes it prohibitively expensive to short penny stocks and maybe contributes to manipulation.

 

So check the fine print with your broker beforehand!

Link to comment
Share on other sites

I shorted a mining stock into bankruptcy and left the position open only to find out IB charged me short interest at rate times $1 (they round price of all penny stocks UP to $1). So i was paying an exorbitant rate every month (more than the position mark). This makes it prohibitively expensive to short penny stocks and maybe contributes to manipulation.

 

So check the fine print with your broker beforehand!

 

Thanks for the information!

I checked my IB account. Apparently all prices are round up to the dollar for calculating borrowing cost. Not sure if this is industry norm.

Link to comment
Share on other sites

I was looking into penny stocks as short target.

 

One thing I saw repeatedly is that some short stock would pop on huge volume. For example, DDAY is a company that losing tons of money and for last a couple of days, price popped up over 30% on volume 10 times normal day. I suspect insiders are manipulating the stock price since who would want to buy such stock at such amount? But I'm not an expert of trading mechanics. Can someone shed some lights on this?

 

I've seen this with BBRY (and other stocks).  It's more akin to any news good or bad can swing stock prices wildly in either direction.  And it isn't always tied to good or bad news can drive stock prices up or down with no sense of rationality.

Link to comment
Share on other sites

Guest longinvestor

If you are thinking of investing in penny stocks, save yourself time by taking a matchstick to those dollar bills

 

Read this as a top 50 tips and tricks on investing.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...