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Selling question...is it hard to sell if the volume of transactions are very low?

edited October 2013 in Fund Discussions
Hello Good folks,

I see some stocks like ATRI where the volume is very low. like 450 stocks traded today.

What if I buy and can't sell it when needed since there are no buyers of that stock. Is it possible that could happen. never experienced it.

thanks
nath

Comments

  • I owned a foreign stock where there was no volume for a couple of months at at time. I tried to sell it and ... nothing. It took probably 30 min but eventually was able to get a market order for it to go through.

    ATRI looks on the illiquid side with decent sized spread between bid and ask, but not the worst I've ever seen.

  • Thanks scott
  • Yes, stocks with low volume can be be hard to sell. There are traders that prey on people needing to sell quickly, putting in low bids on the stock until someone needs to sell at any cost. I have had this problem myself.
  • Reply to @bnath001: Have many shares of ATRI are you trying to sell ? You should put in a limit order price and not put in a market order.
    Regards,
    Ted
  • Oh ok.

    I don't even own it. But I was thinking, if I had it, how would I be selling it.

    thanks
  • can we discuss about Equities also in this forum?
  • Reply to @bnath001: I definitely discuss individual names at times, but if they are the subject of a discussion, I would put them as "off-topic" (you can use the edit function to switch this from a fund discussion to "off-topic."

    As for the original question, I am definitely not against holding illiquid names, but they have to be something I'm strongly interested in as there is some risk to illiquid/very illiquid names. Is the original stock discussed something that is a short-term trade or long-term holding?
  • I am thinking long term (meaning 3 years for me).

    I am 43 years old.
  • edited October 2013
    Reply to @bnath001:

    Please use the Edit function on the first post of yours and switch the classification (category) of the post from "Fund Discussions" to "Off Topic" and save again.
  • edited October 2013
     
  • bnath001,

    The first question to ask is – WHY is there such low volume?
    The usual – and most often correct - answer is that nobody
    wants this stock, not even the little traders.

    The next question – how much money am I willing
    to lose on the gamble?
    The correct answer should be – ALL of it.

    Now, do you like the odds?
  • edited October 2013
    Reply to @AKAFlack: Small company, little float, no attention? I dunno, if that's the case then it could do very well if it gets more attention. A small, not particularly liquid stock does present its own risks, though, as you note.
  • Scott,
    This is pure speculation.
    Generally, institutions cannot buy stocks priced under $10... that includes MFs.
    When and if the price exceeds $10, it will become clear (volume-wise)
    if the institutions are truly interested in the stock.
  • edited October 2013
    Reply to @AKAFlack: The stock in question is $260 and institutional ownership is around 50%. I agree with you that there is particular risks in terms of small/low float companies, especially pink sheet-style companies. However, this appears to just genuinely be a small float company on the Nasdaq. I'm not familiar with it, but it does not appear to be a pink sheet-style situation.
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