I want to buy shares of a stock but I want to make sure it sells at a certain price if it were to get too low so I can avoid the risk of losing my money. My question is that if I put in to sell the stock at lets say $4 but instead of dropping at small intervals it drastically drops to $2, would my stock still sell at that $4 dollar price?
2007-03-08 03:06:46 · 6 answers · asked by roddy414 2 in Business & Finance ➔ Investing
It will only sell if someone is willing to buy it at that price. It is just like a grocery store, if you don't like the price of something you will not buy it.
2007-03-08 03:09:42 · answer #1 · answered by R Worth 4 · 1⤊ 0⤋
Your broker will do everything possible to execute your stop loss order should the conditions (price) be met. However, there is no guarantee that all or even some of your shares would sell at $4.
Nevertheless, on these cheaper stocks, the volume is such that you would probably be able to get rid of your shares at $4....it's not guaranteed though...but it's better than not having a stop loss in place too.
2007-03-08 11:12:14 · answer #2 · answered by Matt K 4 · 0⤊ 0⤋
You are NOT guaranteed $4.00 per share. If you have put your order in as a STOP order at $4.00 then the order becomes an order to sell as quickly and at the best price possible (i.e. at the market) as soon as the first trade occurs at $4 or less. If the stock closes one day at $5.00 per share and then opens the next day at $2.00 per share then you will get something close to $2.00 per share on your sale.
2007-03-08 11:14:51 · answer #3 · answered by Anonymous · 1⤊ 0⤋
NO. The broker will try to sell it as it crosses $4, but if there are no buyers, he will sell it at whatever he can get.
2007-03-08 11:10:03 · answer #4 · answered by Anonymous · 1⤊ 0⤋
No.
Your example is a Stop Limit.
You need to place a Stop Loss.
This means "Sell at $4.00 or less"
2007-03-08 12:58:18 · answer #5 · answered by Anonymous · 0⤊ 1⤋
I have this article only in spanish but you can easily translate it. http://latino.msn.com/finanzas/inversiones/articles/articlepage.aspx?cp-documentid=47982&wa=wsignin1.0
I teaches how to start investing slowly with very low risk.
If you want to start investing first you have to know what kind of risks you can take.
2007-03-08 11:16:19 · answer #6 · answered by Carlos N 1 · 0⤊ 0⤋