Hypothetically, if you buy a stock for $1, and the stock price rises to $10, and you place a sell order to sell all stock at the current price of $10, what assurance do you have that the stock you possess at a current value of $10 will be able to be sold prior to the price plummeting?
Basically I am asking whether there is some system in place so that once you place a sell order for a stock at a certain price, that the stock will be able to be sold at that price prior to the price backsliding?
2007-02-07 04:51:14 · 4 answers · asked by browsebot 2 in Business & Finance ➔ Investing
A limit order will become a market order once the stock passes your threshold price (in other words it will sell above your target.) But there is no guarantee that there will be sufficient interest at that price to fill your order. The market maker actually posts a quote which consists of a price AND a quantity, although you probably don't see the quantity on your retail quote service. He is not compelled to fill more than the advertised quantity.
To take your example, say you have a $10 limit on 1000 shares. The specialist posts a quote of $10x200, meaning he will buy 200 shares at $10. You will get a 200 share fill. If the next quote is $9.90x100, the balance of your order doesn't get filled. Your order is now $10x800, and remains open until the price returns to $10.
You can specify that your order is all-or-none, meaning that you won't accept a partial fill. This involves risk that the stock moves past your price target, but your order remains unexecuted because there aren't enough shares available.
2007-02-07 13:17:35 · answer #1 · answered by anywherebuttexas 6 · 0⤊ 0⤋
There really isn't a way to guarantee 100% that the stock will not go down prior to selling. But, you can place what is called a stop or limit order which can set the minimum price to sell the stock at.
So, if you place the limit order to sell at minimum of $10, then it will sell if price is at or above $10, but if the price drops below $10 prior to finding a buyer, then it will not sell.
2007-02-07 13:01:44 · answer #2 · answered by gabster_65 2 · 0⤊ 0⤋
If you use an electronic system such as Scottrade or TDAmeritrade, hitting the sell price as defined by the user is the trigger event. If you call your broker and give them specific instructions it is their responsibility to sell at your specified price. If you place the order and the price tanks, you'll still own the stock.
2007-02-07 13:00:23 · answer #3 · answered by Amy V 4 · 0⤊ 0⤋
Yea, it's called sell limit. Ask you broker for an open sell limit at $10.00. When the stock hits that price, it will sell it
2007-02-07 13:18:50 · answer #4 · answered by mark c 2 · 0⤊ 0⤋