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I was wondering when they meme stock / "stimmies" traders would get around to penny stocks. The whole pink sheet / OTC market was always looking for the next G
by EMM_386 6y ago
I was wondering when they meme stock / "stimmies" traders would get around to penny stocks.
The whole pink sheet / OTC market was always looking for the next GameStop or "ICO". It was a pump-and-dump playground.
It was a similar environment, as you could gamble with stocks that cost cents per share. Except now, with fractionals, everything can be a "penny stock". The difference is in the volume required to make big price moves.
- aphextron 6y ago>Except now, with fractionals, everything can be a "penny stock". The difference is in the volume required to make big price moves. It's not quite the same thing. You still need to own in lots of 100 to sell contracts. Fractionals are basically just a money making scheme for brokerages taking advantage of naïve retail investors.
- Stupulous 6y agoA poor investor who wants to invest in Amazon but only has $1000 is still able to. A poor investor who wants to diversify can assemble a portfolio that matches a wealthy investor's, rather than investing everything in a couple companies. Fractional shares level the playing field for smaller players. If the issue is that a big benefit of shares is holding 100 of them and selling contracts, why not solve that with fractional contracts? Liquidity, probably. But whole shares have the same issue as fractional shares there, as you're still only getting 1/100th of a contractable quantity.
- Ensorceled 6y agoI think the real solution is force companies to split when they can no longer be effectively traded by small investors. Companies used to do that on a regular basis...