why you shouldnt place limit orders on pink sheet stocks.
heres the big problem. MM's are not required to reflect your order in pink sheets, unlike on nasdaq and the exchanges. So here's what happens. assume you have a 2 million share order at the bid, lets say .01... the MM now can take in up to 2 million shares at the bid and try to sell them at the offer, and his risk is mitigated by your order. he will only fill your order if the ask goes to .01, and he will fill your order to dump his inventory on if it looks lower. Conversely, if you have a sell order in at the ask, he will short sell shares at the ask, knowing he can cover with your sell order. The MM's will trade against your limit orders. If you want to buy, buy at the ask, or sell at the bid. a limit order works against you on the pinks.
