All right. So I'm going to answer another question that was posted in the comments: Thank you guys who have been posting your questions. The question today is how do I trade stocks pre-market when they have very light volume and are not very liquid. So the fact is, we have over the course of the past year seen a number of stocks that have made huge moves not just pre-market but even during regular trading hours like Hudi for instance.

And the whole move even if it was like a hundred dollars a share from 15 to 115 could have been on less than a million shares of volume. So what? I really focus on more than anything is rate of change if a stock is moving I'm interested, but in order to manage my risk I'm naturally going to be looking at the spreads if a stock has a 75 85 Cent spread I'm usually not gonna be able to take that trade. so I want to see the spreads tighten up a little bit? Sometimes the tightening of the spread, the bids filling in by itself is an indicator for me to jump in and try to ride that momentum. So I look for spreads to tighten maybe to 15 20 cents.


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One thought on “Q: trading low liquidity stocks”
  1. Avataaar/Circle Created with python_avatars Your Family says:

    What do you mean by spreads?

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