A steep market decline on a key index, like the Dow Jones Industrial Average or the Standard & Poor’s 500, is normally followed by panic selling by investors, sending the stock market into a deeper spiral. Some traders are likely to keep away from these names completely. While nominal costs typically don’t matter (there’s little difference between a $50 stock and a $500 stock), shares underneath $10 are different. They often face some type of issue, such as weak fundamentals or overwhelming headwinds. Also, institutional buyers similar to pensions and hedge funds typically will not buy stocks that are cheaper than $10, and so they actually turn out to be sparse beneath the $5 mark.
SEE ALSO: 11 Stocks to Sell That Analysts Are Souring On
One fear is that these algorithms may immediate more frequent and sudden shocks to share costs. In 2010 more than 5{88341e94b7344c9e2a295c8eb8caa5f8341647312049503660c614f668284cd8} was wiped off …
