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Sohu.com Inc (SOHU) : The danger of low liquidity stocks

In my opinion, SOHU is a good example of the risk of trading low liquidity stocks.

From the chart, we can see how it breakout of the triangle and rise to $70+.

After that, look at how the price falls from Sept 16 to Oct 16.

The last push up to $71 from Oct 16 to Oct 23 was the worst. Up almost $10 within 5 days and down$10 the very next……and once that happens, when it break the critical support, it just goes down much further.

I was lucky that I was not trading the stock itself and was trading Iron Condors on SOHU.

2009Oct-Sohu.Com Inc-800x600