Hi. I'm a penny stock newbie, and one concept I can't seem to understand or find in books/online is how traders sell a massive amount without causing price to fall. For small trades I understand it has little effect, but I occasionally see pros mentioning they "hold millions of shares" - so how do they cash out in the end without killing the stock? Here's a hypothetical situation: someone buys $50,000 worth of shares averaged at .01 (5 million shares). Several months or years later the company shares gradually rose to .20. This person did not sell any of his shares and now is worth $1,000,000 and wants to get out. Wonderful, but he can't just sell it even a third otherwise the stock price will fall, right? So how would it realistically be done? Thanks. Edit: I think normally is to sell on the way up, but let's say this person held it all for whatever reason and wants to cash out after reaching the .20 price target.
This what I heard but how do they calculate it? Is it a fixed amount each day based on volume? Even if it's selling $5000 daily, it will take 200 trading days and by that time the share price may drop.
Can you please describe how that works? I googled it but not sure if I understood. There are brokers that can match a large trade and it won't show up on the exchange, am I way off? But what if there isn't anyone that wants to buy $1,000,000 or even $500,000 worth of shares? This also brings another point, if there are trades going on behind the scenes, wouldn't this be unfair to traders? Thanks.
There might be nobody that wants to get out but it's worth checking. Buyers of size may contact Management for PP opportunities and may take up an opportunity to do a cross with a seller. I won't comment on unfairness or not. If it's legal then it's a valid tactic. I try to find crosses for companies in micro-cap and small cap markets.
