So, I sell short 5000 stocks for 0.005 (last quote 0.001). But now ask is 50 for every stock !
What I need to do ?
What I need to do ?
Otc short sale - can I refuse buy stocks again if price is abusive ?
- Thread starter thepalatinezoom4
- Start date
I guess he's expecting it to drop to .0000000000000000000000000000000000000000000000000000000000000000000000000000000000000001.
But really, it is a valid question.
Why not just BUY the 5000 shares at .005? What does that cost? Hmm. $25?
So you risk $25 by buying the shares. The most you can ever ever ever ever ever ever ever ever lose by doing that is $25. TWENTY-FIVE DOLLARS RISK TOTAL FOREVER AND EVER!
But instead, you decide to short it. And if the stock shoots up to $100 because of some pumpy-dumpty, you are facing a risk of...*drum roll please* -$500,000.
Or do I just not understand stocks?
Because some otc stocks are very illiquid and sometimes have none sellers or market makers.
Is impossible Nasdaq or NYSE stocks 0.01 go to 200, but OTC Markets is very different - so maybe rules are different ?
Can my broker refuse to buy shares at this price if i fail to close my position ?
Put in an offer to buy at .005 if you want to close the position out without a loss (besides commission) or .006 or .010 if you really want to close it fast. The bid/ask is just what is available to transact immediately in the market. For very illiquid stocks it has very little if any relevance to what price the stock actually trades at. Put in your limit order and see if anyone bites, its the only way you'll find out what the true market price is.