Australian (ASX) Stock Market Forum

Messing about with low liquidity stocks

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31 May 2006
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Some of the types of stocks I invest sometimes have fairly low liquidity.

One of the concerns with low liquidity stocks is there's obviously opportunity for less scrupulous people to play all sorts of silly buggers trying to move price around and draw people into situations etc. All of this would be theoretically against the rules I'm sure, but I still suspect a bit of it goes on based on activity I've seen from time to time - does anyone have any thoughts on this? Is it something to be wary of, or am I being paranoid? Also if it does go on - do people team up to do it?

I guess if people were doing it they wouldn't be like to go advertising it on here anyway. :rolleyes:
 
I'm pretty sure I posted this in general chat - it looks like its been moved to here (either that or I accidentally posted it here when I intended it to go in general chat).

My question is in relation to investing in stocks that happen to have low liquidity and the concern when in that situation that there may be others deliberately using the low liquidity to manipulate price. I'm certainly not advocating manipulation of low liquidity stocks as a trading strategy.

(just wanted to make sure there's no confusion on that).
 
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