Extra Credit - quick buck on small moves. Sirius XM (SIRI)...

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Jon Franco ACCT 305 Extra Credit Citigroup has routinely been one of the most actively traded stocks on the New York Stock Exchange for awhile, with 420 million shares traded daily, but that number could get cut by a factor of 10 come Monday. Citi is conducting a 1-for-10 reverse stock split after the closing bell Friday. That means the number of shares outstanding will be reduced in order to boost the stock price. The value of Citi does not change though, so instead of 100 shares being worth $44.48, one would buy/sell 10 shares at the same price. Whether this move helps boost Citi's fortunes is debatable. Many major fund managers won't touch a stock that's below $5 a share, so Citi may now pop up on their radar screens. But reverse splits are also often viewed as an act of desperation. Fewer shares for Citi should lead to even sleepier days in the market for the foreseeable future. It's worth noting that other big volume stocks are ones in a similar situation to Citi: large share count and low stock price. That's like manna from heaven for active traders looking to make a
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Unformatted text preview: quick buck on small moves. Sirius XM (SIRI) and Sprint (S, Fortune 500) are two single-digit stocks that are heavily traded. This can be seen as both good and bad news for the markets. On the one hand, low volume may signify a lack of conviction: when stocks go up without a lot of trading, it may be a sucker's rally. But on the other hand, low stock volume apparently doesnt hurt as much as it used to. Ryan Detrick, senior technical strategist with Schaeffer's Investment Research in Cincinnati, says that low volume may be something that's confined to stocks, and that investors may simply be gravitating toward other asset classes, such as commodities, currencies and options. Source: http://money.cnn.com/2011/05/06/markets/thebuzz/index.htm Jon Franco ACCT 305 Extra Credit "Without question, Citi's split will affect volume," said Ryan Detrick, senior technical strategist with Schaeffer's Investment Research in Cincinnati....
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Extra Credit - quick buck on small moves. Sirius XM (SIRI)...

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