I want to buy 20,000 shares of a particular company at this moment. Does it mean that it is possible for me only when someone else is ready to sell those 20,000 shares at the same time ?
2007-08-26 04:33:48 · 7 answers · asked by Twilight 3 in Business & Finance ➔ Investing
Yes -- there has to be someone willing to take the other side of the position. It could be made up of other investors who are selling their own shares, speculators who are borrowing shares and selling them short or a market-maker who is willing to take the other side of the position.
Buying 20,000 shares in one big block may not be the best way to go. If it is a stock with low volume, a trade that big will move the price against you. It would be better to buy it over time in smaller chunks or to negotiate a price with someone willing to sell a large block as a private trade.
2007-08-26 04:57:00 · answer #1 · answered by Ranto 7 · 3⤊ 0⤋
Depending on the size of the company, you may or may not have trouble buying this many shares at one time.
If you are buying shares of a large company like Microsoft (MSFT) for example. Then you won't have much trouble buying that many shares because tens of millions of MSFT shares are being traded every day.
But if you try to buy 20,000 shares of a thinly traded company that doesn't have many shares traded in any given day. Then you probably still can buy that many shares at one time with a market buy order. But your large purchase will probably raise the price of this stock so much that you will end up overpaying for it. And you won't be very happy about it, when the next time someone else buys a small number of shares for this company at a much lower price and drastically decreases the stock price back to where it was before your large purchase.
When you put a large market buy order and there aren't enough shares being sold to fill your order at the current price. Then people who put limit sell orders at a higher price in order to take profits from their shares will also have their sell orders executed. And some people who think that the new high price is too high will put in sell short orders at this higher price.
When there aren't enough shares to be bought at the current price. Then you can increase the number of sellers by raising the stock price and making selling attractive to them. And that's what happens when you make a large market buy order that exceeds the stock's current trading volume.
2007-08-26 05:10:26 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The correct answer to your question is "Yes" & "No"! LOL...
Theoretically, there needs to be a seller wishing to sell 20,000 shares to meet your desire to buy 20,000 shares at the particular time you wish to do so.
In practice, however, for most "legitimate" stocks, there are folks called "Market Makers" who in effect work for the exchange and/or the issuing company who have a pool of available stock to "smooth out" variations in the demand to buy or sell particular issues.
This is only true of "real" stocks, though, and is not generally the case with OTC, Pink Sheet, or thinnly traded issues...
2007-08-26 05:29:13 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It depends on the market. Some markets have 'market makers' whose job is to make trades possible. See the link below for more info.
2007-08-26 04:51:29 · answer #4 · answered by I don't think so 5 · 0⤊ 0⤋
1) Yes.
2) No.
2007-08-26 07:25:38 · answer #5 · answered by Anonymous · 0⤊ 1⤋
you bet ye, you got the cash, they got the shares.
2007-08-26 10:51:48 · answer #6 · answered by Anonymous · 0⤊ 0⤋
check this link its useful
http://jtty.com/lrz
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2007-08-26 23:13:47 · answer #7 · answered by Anonymous · 0⤊ 1⤋