In the age of coronavirus, many individual stocks have experienced significant volatility with their stock price and some investors have encountered meaningful discrepancies between the buy and ask price of a particular stock.
Most stocks that are discussed on this site are highly liquid blue-ship stocks. This means that the price of the stock tends to trade in penny-by-penny increments. For instance, if Coca-Cola stock is trading at $48.32 per share, there is probably someone offering to buy the stock around that range and also someone trying to sell the stock around that range.
However, with thinly issued stocks such as micro-cap banks, the gap between the bid and ask price can be quite significant. In particular, the ask price of the stock may sometimes appear to you to be triple or even quadruple the most recent sale price of the stock. When you see this, you might wonder whether … Read the rest of this article!