Anyone else following SOLO Oil Plc?

rfowler

Anyone else following SOLO Oil Plc?

I bought in yesterday afternoon but only put in £300

Was wondering to top up or not?

Nanpy

I'd be cautious now it's spiked. It was up over 50% today but enthusiasm seems to be dying down. Typically with a spike the price will drop off the next day. But who knows? We'd all be billionaires if we could predict this sort of thing.

billy_bulldog

It's one I spotted literally late in the day it peaked, and i've been following it since. What I want to know is the spread - one minute its 6p (139-145p) then in almost no time its a penny (145-146p) - can someone explain that please?

EDIT - I've just looked at a few other share prices and the spreads are always greatest in the morning, closing to a minimum at around midday. Why is this?

rfowler

Am out at 1.44 nice little profit

Nanpy

Spread is what the market makers use to earn their crust.

According to google finance volume today has been 900 million shares at 1.4 p, so very roughly ten million quid traded on a company with a market cap of about three times that. Yet the spread is quite large.

Normally a large spread indicates low volume - ie because there aren't many shares being traded the MMs want a bigger cut to make individual trades worthwhile. So they offer to buy at 10p but sell at 12p and pocket the difference as their commission.

A 3% spread or so on SOLO suggests the MMs are just taking advantage of a feeding frenzy. People were prepared to pay a premium to get in.

Tomorrow or later next week the hype will die down somewhat and you can buy back in, rfowler if you think they have longterm prospects. I honestly have no idea - I'm heavily into XEL at this stage and happy there.

I try to stick with long term investing these days. Trading day by day was giving me ulcers and I simply wasn't equipped to do it properly.

Oh, nearly forgot - day traders buy into their positions earlier in the day and tend to sell up in the evening, hence the generally smaller spread in the afternoon.