this is a repost, however i think it answers the question. (same question i had awhile back)
<<Viki, small share totals like 5000 on a penny stock can be several things.
Sometimes Market Makers will put a very small amount of shares up for sale to give the appearance of a lower ask than really exists. You may want to buy 100,000 shares but they only sell you the 5000 and then the ask moves to say .0145. MM's make their money on the spread. Perhaps they want to try and move the spread up to get more money per trade. If they give just 5000 shares and the ask moves, some fool will think the a run is taking place and they will chase the price upward. It's all a game. Most folks know better than to chase a price.
Let's say MM's are short of shares, they have sold their inventory. They at times go short and need to balance up but don't want to lose money by paying more for shares than the price at which they sold them. The real bid/ask from people buying and selling are .0135/.014, but they will usually hid the higher bid. On a level II screen they will show you instead a bid/ask of .0125/.014. Psychologically, people hate to buy at the ask on a large spread so the trading slows. Then one Market Maker will sell a small amount of shares to another MM at .0125. This gives the appearance of a weakening bid, and people buying at the bid. This causes some to sell as they think the price is eroding and the Market Maker gets his cheap shares. The reverse of this can happen going up if Market Makers want to do a quick pullback on the price of the stock.
Watching the volume of shares on each trade is important to read what the MM's are trying to accomplish.
Penny's are a jungle, good luck.
airdale
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