Thursday, May 20, 2010

Hedge Funds Shorted Stocks at 1 cent a share

It may be hard to believe, but hedge funds shorted stocks at one cent a share. This is due to the fact that market makers need to made markets all the time and sometimes put in a bid of one cent.

Well the market makers got lucky and bought shares at a penny when hedge fund computer programs sold at the market during the market crash on May 6. A couple of stocks that supposedly traded for pennies include Accenture plc (ACN) and Proctor & Gamble (PG).

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