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Hi,
I'm looking at buying an OTC stock whose ask/size is $.40 and 2,500 shares but the bid price is $.03 and 10,000 shares. Does that mean that if I wanted to BUY 5,000 shares it would cost $2,000 but if I wanted to SELL 5,000 shares I would only get $150? That seems weird! But if that's right, what happens to the missing $1,850? Does it go in the market maker's pocket? |
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With such a large gap between bid and ask it seems that there really is no market for these - I doubt that anyone is actually buying and selling this stock. You are correct - if you bought these at $0.40 and sold at $0.03 you would lose a lot of money, so it's not a good deal for you. Better to buy at something close to $0.03 and hope the bid price goes up from there. A word of advice - for OTC stocks like this unless you are an insider the market is stacked against you with the market maker getting rich on your losses, so I woud avoid this.
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