Financial Freedom

Penny Stocks

Women’s apparel retailer J.Jill (JILL 4.86, -5.07) was hit even harder, plunging 51.1%, after lowering its forecast for third quarter same-store sales.

It dropped 51.1% after JILL cut their outlook for the third quarter. It is much easier to have a big gap up or gap down for Penny Stocks, this is one of the reason why I always avoid invest or trade penny stocks or stock with low liquidity. Imagine for those holding long positions on JILL, then it gap down 51% and even you have Stop Loss order in places, it will still sell at the price at 51% lowered.

This sometimes make me think, trade Options could be a better instruments than underlying and CFD.

You can read more about what happened to JILL on 12th October here.