Ok, so as a new investor I created the typical big mistake of investing in a penny stock on the OTC marketplace. I had purchased a couple hundred dollars of the stock a couple of weeks back (.18 cents) and at some point it had gone up but I decided to hold it. Then two days ago the stock fell to just above it’s all time low of .10 cents. The stock had been performing consistently above the low for awhile and the news was great so I decided to buy more. A lot more. More than I can afford to shed. Now the last two days the stock has fallen 20% below what I purchased at even though all the news reports on the company are great! I do not know why it is falling and I cannot sell what I have. What are my options? Can I sell even at 50% of the current cost? How can I discover buyers? Or am I screwed??
Well I’m not going to disclose the ticker for obvious reasons (Ask me after I’ve sold). But my question is whether I should maintain lowering my sell cost until it sells?How can I recover as much as my cash as feasible?
Incoming search terms:
- lose my shirt in penny stocks
January 11th, 2010 at 2:51 am
ohh man that stinks, i been there a few times before in the past, at least you learned a lesson stay away from the OTC market, so illiquid and easly manipulated, i’d sell what you got, at least sell half your position, theres always buyers out there, even if you forced to sell on the bid not the ask, whats the ticker?
January 11th, 2010 at 10:48 pm
Place a market sell order, take what you can and consider it a tough market lesson. Don’t get into penny stocks again.
January 14th, 2010 at 2:04 am
You don’t mention the daily average volume in your question. That would help in assisting you in getting out. It may pay to put small amounts out for sale as a “limit” order. the bottom line is…. money management is the key to any investing… but it’s most important with penney stocks. The bottom line is you have to take a loss because it can get worse. It may reverse the day after you’ve sold it… but you really have no choice.
I trade every day. I never buy stocks below $1. I rarely buy stocks below $3. I have this rule because I understand how they work.
When I first started investing I was also attracted to cheap “Story Stocks”…. another lesson…. they all have a compelling story which almost says….. you have to be an idiot not to buy me. The truth is…
professionals steal money from traders like you everyday…. every hour.
This was an expensive lesson for you. Learn from it. Experianced traders don’t get into positions without knowing their risk first. They’ll generally limit the loss to 1% – 2% of the account value in any one trade using a hard stop. Position sizing is very important. Never get into a stock hoping for a “home run”. The real winners in this game win by singles & doubles. We may average up…. but we never average down”.
If I can be of further assistance. Let me know.