I'm at a loss here, my research suggests that I would get anything between the two. Who would decide what I recieve?
2007-09-02 22:34:11 · 5 answers · asked by Malik K 2 in Business & Finance ➔ Investing
You always get the worst deal.
Selling you get the Bid price
Buying you get the Offer Price
The difference is the Spread which produces the income for the Market Makers (who link buyers to sellers).
The spread is quite large in this case indicating there is little volunme of interst in this share so large shareholders dealings can greatly effect the price.
The price you get will depend on whether you get a fixed quote or at market (the price is determind by supply and demand when the brooker executes your order)
2007-09-05 07:14:52 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The difference between the Bid and the Offer is the spread, and it depends where and when you are getting your quote. 284 to 304 is a big spread and suggests that it might be at the start or the end of the day, when the brokers or marketmakers are not sure which way the price is going to be moving next. Sometimes it can reflect the spread of prices during that day, depending on where you are looking. THEN there are the dealing charges - commission charged by the broker plus stamp duty if you are buying, but in your case selling does not attract stamp duty.
It also depends on whether you are dealing in a blue chip stock, usually a very small spread (one of the top 100 companies for example) or a high risk stock having a higher spread to reflect the risk. When you are dealing, if you don't like the quoted price, you can always refuse to make the deal.
Also as you suggest it could be anywhere between the two prices. The broker you are selling or buying through would decide the price at which your deal would go through. You decide ultimately by your decision of yea or no. BUT then don't forget the brokers commission that has to be taken off.
2007-09-03 03:04:13 · answer #2 · answered by simplythejest 4 · 0⤊ 0⤋
Bid price means the price at which the buyer wants to buy the shares and offer price means the price at which the seller wants to sell the shares.
The price that you will get may depends on supply and demand i.e. volume. If you want to buy at 284 then your chance will come only when the other earlier bids of 284 are executed and if some sellers change their minds and want to sell at 284 or if some new seller comes to sell at 284.
So other sellers will decide whether you get your price or not. because you are the one who wants to buy at certain price but you will be able to buy only if the seller agrees to sell you.
If you want to buy at market price then the price that you will get will depend on the price that the seller wants to sell AT THE TIME YOUR ORDER IS EXECUTED. usually it can be between the bid and offer price however in some cases where the volatility is very higer you may get the price much lower or above these two prices.
2007-09-03 02:15:43 · answer #3 · answered by Bhavesh Patel 2 · 1⤊ 1⤋
You buy at the offer price. You sell at the bid price. The difference represents the dealing charges.
2007-09-02 22:48:08 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Selling ? then you get 284
Buying ? then they charge 304.
A good Broker can sometimes buy/sell 'within the spread' by a penny or two (at these prices)
2007-09-04 11:37:27 · answer #5 · answered by Steve B 7 · 0⤊ 1⤋