You just described a classic example of a non-liquidity stock. A stock that on a normal trading day, there are no buyers and sellers. Marker makers have no competition, and they do whatever they please to rob you blind. There are very little money to be made trading this stock from the point of view of the MMs. And the MMs who market this stock are using every tricks on their book to squeeze an extra buck from anyone who buy or sell ETCR.
The action today make me think twice about buying large amount of shares of ETCR for trading. It is tough to pay 17% spread, can only get fill on 5000 shares on the average for an average of $400-500 dollars and pay 15 bucks commission for each trade.
ETCR has about 15 Market Makers, but only 2 are actively trading it (GVRC & NITE), and it seems as if they take turn to market this stock; there is just not enough money for other market makers to jump in and compete for business. That is the main reason why you see such a large spread and funny fills. You are at the pity of the MMs, and they have a full bag of tricks to rob you.
I have watched this stock only since it ran up on April 3rd when volume picked up in the millions, and the last two days were the real trading pattern for this stock after the run had finished and the ash had settled. I don't like what I see here when volume slow down. ETCR is a very non-liquid stock. You can buy or sell 10000-20000 shares, but anymore than that, it will cost you to trade it. It will be very difficult to unload large amount of shares (50K or more), even during the run up.
<< It looked to me like they couldn't get many sellers to help get a little panic goin. What do you think about today's action? >>
I have to disagree with you here. When the MMs want to lower the price, they will lower the price regardless. They don't need to create panic to lower them. And if they want to create panic as you said, that is the easiest trick for the MMs to do.
Finding buyers to hold the bag is more difficult, and the MMs just simply don't want your shares today because there are no buyers. If there were high demand for this stock, the MMs would have filled your order, and turned around to sell it at ask for a quick profit. They were trying to discourage you, with the hope that you got sick of it and put in a "market order" instead of a limit order. You already know what will happen and the rest of the story if you put in a market order, I guess I don't have to explain it.....lol
ETCR will run again, at least one more time by June 19th. Until then, patience is the name of the game. It will go above 10 cents again, but I have to get it below 5 cents to worth the risk versus reward for me to hold it for 2 months. It is better to buy a small position below 5 cents (unless I can get it below 3 cents, then I will load up), and wait for the volume to pick up before I add more, even if I have to pay higher price.
My 2 cents ! :) |
