52 Ways of Making Money in Stock Market - Part 30/52 - One bid profit

For lower price counter, one bid higher can make profit.

Example, ABC stock is trading at $0.06 and $0.065. You que to buy at $0.06, if matched, immediate sell it at one bid higher, that is $0.065. If manage to sell at $0.065, your profit is 8.3%. After minus out buying and selling brokerage, you may make 7.3%. No need the price to move up, just trade at buyer or seller quotes and you can make profit. If you can repeat that many times in a year, you may make 50% or 100% in a year.

In Bursa Malaysia, there are many counters that are trading below $0.20. One bid can actually make profit. The lower the price the higher the profit.

Those price more than $1.00 also can be done, but the percentage gain is very little and your brokerage fee need to be low and you need to trade big. After minus buying and selling brokerage you may get less than 1% but if you can repeat it frequentlty, then the total percentage gain can be high if annualize it. The higher the price, the less profit but easier to get your order matched.

RISKS, LIMITATIONS OR DIFFICULTIES:
One bid profit has very little profit, just few percent or in some case less than 1%. If the price drop sharply, you may lose out more than 10%.

Many people are always doing that. That is why you notice there are many people queing to buy and queing to sell the counters that is less than $0.20, especially those less than $0.10. You may not get the chance to buy even you que there for many many days

Normally the counters that is less than $0.10 are poor in fundamental, the price may continue to go down or even be delisted. But there are still come counters that are profitable.

You can only make small profit. In the above example, because you immediately que to sell at $0.065, even if the stock shot up to $1.00, you only manage to sell at $0.065.

To make more profit, you need to repeat your trade many times.

Time consuming because you have to actively buy or sell.

OPINION:
You must ask yourself few questions. What are the chances that the stock price will continue to drop. What are the chances that you manage to buy or manage to sell, and how many times in a month? Are you willing to earn little profit but the loss can be high if market move against you.

You may want to consider counters where there have high volume but less people queing to buy or sell. The chances of your orders get matched will be higher.

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