Liquidity
It is vitally important that enough volume trades so that you can easily sell the shares when it comes time to get out. Trading illiquid shares is a recipe for disaster and even a hefty discount can evaporate if enough people try to sell at the same time. As a rule of thumb ensure that the share has a turnover of at least $1 million per day. This can be calculated by multiplying the average volume over the last two weeks by the current price. If it trades less than this it is probably best to avoid this opportunity.
y.
Found this while researching, I decided to calculate RCG's average daily turnover for the last two weeks. Please see attached. Slightly worried as it is around $800k which is less than the rule of thumb 1 mil. What is everyone's opinion on this? This is in regards to the RCG SPP
RCG SPP - Liquidity
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Last
$2.04 |
Change
0.030(1.49%) |
Mkt cap ! $1.148B | |||
| Open | High | Low | Value | Volume |
| $2.02 | $2.04 | $2.00 | $2.711M | 1.337M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 7 | 79044 | $2.02 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $2.04 | 157278 | 15 |
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| Last trade - 16.10pm 21/06/2024 (20 minute delay) ? |
| AX1 (ASX) Chart |