There are inherent risks when trading a stock that has low trading volume. One risk of low-volume stocks is that they lack liquidity. Liquidity is the ability to quickly buy or sell a security in the market without a significant change in price. If you have a large number of shares of a security that has low trading volume and attempt to sell, you are flooding the market with a large supply of shares and can cause prices to fall considerably if the demand remains at a consistently low level. If you place a large trade of security with low trading volume, you will drive the price significantly up if you are buying, or will drive the price significantly down if you are selling.
