Use Limit Orders When Penny Stock Trading
We strongly recommend you use limit orders when penny stock trading due to the often limited availability and liquidity of penny stocks.
A penny stock market maker can sell you the stock at a higher price than you want them or a lower price than you are willing to sell for. Placing a limit order protects yourself.
This is particularly important if a stock has very little trading volume. There may be few market makers for the stock lowering competition and the market maker will have time to make a value judgment on your trade and adjust their price to their advantage.
Remember, you may well be dealing in a large number of shares (say, 50000) so just a $0.10 difference in the fill price can mean the difference between a decent profit and a substantial loss.
Dave J.
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