What is so dangerous about Trip-Zero's?
Selling is the hard part...
So you might be thinking, "What's so hazardous about a .0001 stock? It can't go any lower." Well.. that's not really true. First of all, if the stock has no bid and you buy at the ask of .0001, you've immediately assumed a 100% loss. Why? Because, with no bid, you couldn't even sell the stock readily if you wanted to.Remember, you can't sell it for less than .0001. So, to simply get out of your position even, you'd have to put your sell in at .0001, and hope your shares are bought up by someone else. Now the issue with this is you are now at the very back of a long line of people trying to sell shares for .0001. That's the way the market works. Orders sent to a particular market maker get filled first come, first serve, and if you're at the back of a long line, you are going to be waiting until the last of the shares offered at .0001 - yours - are bought. Once in a while you might get lucky depending on what market maker your broker uses. Say you use E*TRADE, which has its own Market Maker (ETMM), and you are the only one trying to sell shares through ETMM at .0001. If a fellow Etrader comes along and decides to buy shares, they will most likely match your orders and you'll get filled before the line of people waiting behind NITE or AUTO. Chances are, your market maker already has a bunch of orders queued, but every now and then this might work to your advantage.
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