InvestorQ : What do we understand by low impact stocks for intraday trading?
Niraja Mehta made post

What do we understand by low impact stocks for intraday trading?

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Niraja Mehta answered.
3 years ago
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In technical parlance this is called the impact cost? It is the impact on the stock price when you place a large buy or sell order on the stock. Lower the impact cost, the better it is for you. It means your orders will go through easily even if you want to put in large trades. Obviously, you can get stocks with zero impact cost but prefer the one with lower impact cost. When impact cost is high, risk of intraday becomes too high and hence such stocks should be avoided for intraday trading. High impact cost means you will get the stock at a price that could be unfavourable to you in case of large orders. That is the last thing you will want. This will change the economics of your intraday trade. If you choose to trade with a large capital and place big orders, then this is a vital point. Each time you get a bad trade or high impact cost, it makes a difference to your eventual cost of trade and your break even point.

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