If anyone buys 10000 shares of Jaypee Power @ 2.8 for intraday trade and sells them for 2.85. Will it be a valid trade?
Why not?
It will be a valid trade, of course.
However, be aware of this common illusion/trap beginners get into after seeing the charts of penny stocks like JP Power.
They think: hmm, the stock is oscillating between 2.8 and 2.85 for about an hour. Why not just buy it at 2.8 and sell at 2.85?
The problem is liquidity; the probability of your order getting filled is very low. You would be scratching you’r head as to why the sell order didn’t go through even though the last traded price is at 2.85. A trade like this can trap you for several hours or worse, start shuttling in a lower band (2.75-2.8).
IMO, these trades are not worth the time and effort. Essentially the same as flipping a coin.
-Neha (vrdnation.com)
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