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Tuesday, March 5, 2013

Penny Stock & Freak Traders

Birla Cotsyn India Ltd. is a penny stock which is presently trading in the 10-15 paisa range.

What makes this price-range lucrative and intriguing? 
If someone buys this stock at 10 paisa  and succeeds in selling it at 15 paisa , he makes a profit of 50% that too in a day or a few more.

If someone is fortunate enough to secure this 50 % return in a week and  when this return is annualized comes as a whopping 2607 %.

Compare this with the FD return which is presently only 9% per annum !

But wait !

On the flip side, if someone who had bought this stock at 15 paisa and liquidates his holding at 10 paisa (for whatsoever reason) loses 33 % of his capital.

For past few days stock is trading in 10-15 paisa range

Hopeful traders voraciously try to buy at 10 paisa and attempts to sell at 15 paisa but only a few succeeds to do so.

There are a large number of buyers who everyday place orders to buy this stock at 5 paisa.

A snap of market depth window
By the time of writing this post, there were around 2.37 buyers for a single seller.
Trading in this stock is very difficult and only few lakhs of shares get traded out of a couple of crore orders.

Morale is, trading in this stock is a high-risk & high-gain proposition and trading in this scrip being illiquid, a lot depends on your luck.


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