Illiquid Stocks

In by Peter JenningsLeave a Comment

Peter Jennings

Hey guys,

I understand that stocks go up and down based on investor sentiment, if more people want to buy the stock its going to rise in value. In the case of illiquid stocks, as the stock is traded at such low volumes could you not dump a large amount of money into the stock which will cause the stock to rise in price and then immediately sell at a profit?

For example, looking at Medibio Limited (MEB), whilst writing this the stock is currently trading at 0.012, say somebody dumped a large sum of money into the stock given it’s low price and trading volumes would it not then rise in price and the investor could immediately sell for a profit?

Sorry if it’s a stupid question, still relatively new to the stock market and haven’t dabbled in small cap stocks.