In the last week there has been many 10000 blocks traded at a penny?? I wonder why??
This is how traders conduct block trades. Occasionally block trades involve two parties contacting each other directly and arranging to make an exchange for an agreed-upon price. However most of the time they place trades through a blockhouse. That is an institution which sets up large scale trades outside of the ordinary financial market. For example, it might facilitate trades of 1 million shares of stock off the New York Stock Exchange to prevent that sale from causing volatility in the market.
Along with analyzing a company’s balance sheet, the penny stock trader should look to do an industry life-cycle analysis. Some penny stock companies are in a sector still in its “pioneering phase." This initial phase is characterized by the presence of a large number of small-sized competitors in the space, novel products and concepts, and low customer demand for the products. Because this period is marked by a slew of start-up firms (particularly in tech or biotech), all of which have high costs and little-to-no-sales to date, most of these companies will trade at very low prices owing to their speculative nature.
Following this initial phase is the “growth phase," in which many of these companies gain greater market attention and thus their sales and demand skyrocket.
