Penny stock query

[Mr Anderson]

lets say I invest in a penny stock with a market value of 0.001. If I invest $5000, and the stock doesn't do what I think it would, but their is a decent amount trading volume on that given stock, is 'getting out' simply as easy as selling the stock for 0.001 and losing only the buy and sell brokerage?

Obviously the last thing I want is to be left holding $5000 worth of stock that no one wants. I have bought and sold before, but never outside the ASX 200. Just leaves me feeling slightly uneasy as this part of the market is foreign to me.

Also, are such companies in danger of one day just falling of the market, and along with it, your investment?

 

[burglar]

lets say I invest in a penny stock with a market value of 0.001. If I invest $5000, and the stock doesn't do what I think it would, but their is a decent amount trading volume on that given stock, is 'getting out' simply as easy as selling the stock for 0.001 and losing only the buy and sell brokerage?

Obviously the last thing I want is to be left holding $5000 worth of stock that no one wants. I have bought and sold before, but never outside the ASX 200. Just leaves me feeling slightly uneasy as this part of the market is foreign to me.

Also, are such companies in danger of one day just falling of the market, and along with it, your investment?

Your worst fears confirmed!
There are many excellent posts on your scenario.
Some that I know of, are in these two threads!

"My Worst Pick Ever"
https://www.aussiestockforums.com/forums/showthread.php?t=21130

"The art of entering and exiting a multi bagger"
https://www.aussiestockforums.com/forums/showthread.php?t=24871


Excalibur (ASX: EXM)
After a consolidation in Apr 2013 of 1 share for every 100 held!!

 

[skc]

lets say I invest in a penny stock with a market value of 0.001. If I invest $5000, and the stock doesn't do what I think it would, but their is a decent amount trading volume on that given stock, is 'getting out' simply as easy as selling the stock for 0.001 and losing only the buy and sell brokerage?

Obviously the last thing I want is to be left holding $5000 worth of stock that no one wants. I have bought and sold before, but never outside the ASX 200. Just leaves me feeling slightly uneasy as this part of the market is foreign to me.

Also, are such companies in danger of one day just falling of the market, and along with it, your investment?

You need to understand the basic premise of bid, ask, market depth, time/price priority etc.

You can't just enter and exit at the "last traded price", especially with stocks trading at 0.1c. There is usually a large queue lining up to sell, with no buyers.

Here's one example...



As you can see, it's easy to get in (there are 63.36m shares to buy at 0.1c) but not possible to get out (exactly zero bidders). If you place a sell order you join the queue at the back of those 63.36m shares. So it could be quite a while before your order is traded.

And share consolidation and delisting are other possible outcomes.