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re: Question about how stocks work?
Posted on 6/23/20 at 12:39 pm to Cycledude
Posted on 6/23/20 at 12:39 pm to Cycledude
quote:
I’ve never heard of someone not being able to purchase a stock, or having to wait for them to become available?
If you place a “market” order, the order will be filled at the best available price. If the stock has really low volume, this could mean buying at the ask price even though that’s significantly higher than the current ticker price. If you then turned around and placed a market sell order, it could mean selling at the bid which could be significantly lower than the price you just paid. Basically this means that immediately after buying the stock, you can only sell at a loss unless the stock price increases enough to overcome the bid-ask spread.
There are enough shares on the major exchanges that you can always buy or sell a stock, you just may not get a fair price.
Posted on 6/23/20 at 2:33 pm to lostinbr
There are what's called a "Market Maker", which are large companies like Fidelity, Goldman, JP Morgan. They facilitate trades to assure swift transactions and route the shares as needed to other traders. Many times it happens in seconds, other times it could take a while.
Posted on 6/23/20 at 6:49 pm to Cycledude
Thanks all you guys for the education. I think I have a better understanding now!
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