[isatrader]

What are your thoughts on the EMS? Surely a stock with an EMS of £200 is going to get bludgeoned by broker's fees as not only will it have a spread to get over but a fee of about £15 is an extra 7% of cost. And then the same to get out.

So add the stamp duty (if applicable) and the spread and we're looking at something in the order of the stock having to rise at least 18% just to break even.

Is it worth looking at these low EMS shares at all?

- Malc

By EMS are you talking about the normal market size? i.e "A share classification structure based on the number of shares outstanding. This determines the number of shares that a market maker can trade at the quoted price."

I agree the normal market size of 2000 is very small on ZZZ.L, and wouldn't be something that you could trade short term due to the fees and spread like you mentioned. But with a 52 week average true range of around one third of the current price, it seems to have the price volatility to be able to compensate for it in the medium term, and so a position size of two times the normal market size plus spread and fees would cost roughly £560 currently. Which if you were planning on holding for the longer term and think it could make it back to and above 2012 level of 70p then it needs a 500% move.

So, it's definitely something you need to consider with the smaller stocks as fees and spreads will put you at a big disadvantage straight away, and hence why a large increase in relative volume is necessary, which will improve spreads, and you might have to wait a while for the NMS to increase to a more suitable level, and hence not get in at the Stage 2A breakout on some of the minnows.