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Online Share Trading

Engage and learn about markets and trading online

Trading small quanties of penny stocks.

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klapka
Super Contributor
Hi Can someone explain to me why there are constant trades of small amounts of lowly priced shares for a few hundred Rands? Is it worth it? Surely broker fees make such deals uneconomic? Or am I missing something? Are they trying to trigger stop losses and thus manipulate the price? Or getting a better brokerage rate than me? I would appreciate any ideas please?
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4 REPLIES 4
Blik
Super Contributor
Sometimes if you put through a trade at a specific price, there may only be a certain number for sale at your specified price. Later on there may be more available at that price. Normally SFM call me in these situations if the full amount I am trying to get, isnt available. That may account for some of the small trades. Some may just be mistakes - it happens - you forget to add a zero or couple of them to the trade. I know someone who has done this.
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CrownA
Super Contributor
Sorry I believe it is brokerage firm traders who are not paying any brokerage fees, and people with huge money in a share, who play these small trades to trigger stop losses and trigger buy signals above a trend line or signal line to get buy in, and to start a share moving up/down.
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SimonPB
Valued Contributor
nah, mostly it is people who don't understand what they are doign and how the costs hurt them.
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klapka
Super Contributor
I think there may be some truth in Crown A's comment. Example look at Dialogue DLG. Someone just sold and bought around 1400 shares at 15 cents. Later the price may be up to 17 cents again for a few shares. This has been happening for a few days and I can see the same occurring with several other penny stocks. Why?????
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