General Question

isorabins's avatar

How can a penny stock with a high trading volume have no move in price?

Asked by isorabins (50points) July 13th, 2007

it seems like a stock with a trading volume over 9 million shares would move, but it doesnt change price at all.

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1 Answer

1wealthbuilder's avatar

You may be dealing with a company that has no earnings yet, but plenty of marketing push. I get 20 stock spams a day. These have been notoriously responsible for volume movements vs. price.

You could also have a “shell game” which is common with penny stocks. This is where a network of buyers and sellers inflate trading volume by buy/sells as favors to their friends. Remember the movie “Boiler Room”?

You could make money by selling options on your stocks and letting them expire, as they will do if there is no price changing.

We call that free money!

Check this Personal Finance blog for more help.

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