Most foolish comment I have ever heard. Hero Honda traded less then 500 shares in 1996; Infy traded less then 1000 shares in 1995; HFCL, Global tele, DSQ and Satyam traded the most during the tech boom!

 

One of the signals of unpopularity is illiquidity,the fact that stock is illiquid means that people are not willing to let go and you need a higher price to get the thing off their demat account. ALl things being equal an illiquid stock outperforms a liquid name over the longer term.

 

Now can someone ask this journalist as to why would a speculator get into an illiquid name? SPeculators love liquidity and mommentum and you cannot get any of these in illiquid names.

 

 

 

 in 2003 one could not buy 500 shares of Trent without bidding up the price 4%; he cannot buy it even today and Trent has underperformed

 

Originally posted by Hitesh Shah On liquidity in general with a bit on illiquid stocks   Prefer stocks with higher volumes and lower bid/ ask spreads, as the influence of speculators and the impact of large orders on such stock are relatively lower

 

Ms/Mr *** *********,



Thank you for giving us an opportunity to assist you.



With reference to your telephonic conversation with our executive dated **/**/****, we request you to kindly provide a letter justifying the details of Repeated consecutive high trades done in the account **** in the scrip **** ******* ******as on *** and ****, 2009 confirming all the below points:


Kindly elaborate your explanation on the below queries.:


1. What was the reason for trading (buying) in the scrip **** ******when trading volumes are lower?


2. Explain basis of arriving at the price traded for scrip *** ******.


3. Do you confirm the trades executed?


4. Do you have any specific information regarding the scrip **** ******?

5. Is the trading in the scrip **** ******based on his own analysis?

6. What was the objective of trade? Was it with long term or short term objective? Please specify the reason for the same.

7. Do you and will comply with insider trading regulations of the stock exchange and company Please confirm.

8. What is the % you are holding till date in scrip **** **** and accordingly do you give open offer?

9. Are you related to promoter/director group of the company **** ***** directly or indirectly?(if yes, specify the relation)

10. Specify the quantity and the price range at which you will be trading in the stock **** *******.

11. Are you aware of the counterparty broker or the client?

12. Is the trading in sync with your normal trading pattern?

13. How long have you been holding the stock **** *******?

14. Does the order in the scrip match with your risk appetite, trading profile and investment objective?

15. Are you authorized someone else to trade on your behalf? Whether appropriate authority letter was given?


You are requested to mail us the details at **** @****.com/. You may also courier the same at the below mentioned address:

We always look forward to bringing you the best of our services and hope to continue with the same co-operation and

support in future.



Best Regards,

Originally posted by Hitesh Shah Basant and Subu have both mentioned getting "correspondence" regarding their purchase of illiquid stocks. Despite my request, the content of this correspondence hasn't been provided on TED. I hope they oblige.