stock question

[pokergod]

I'm new at stocks and have been reading up on them.

question is on selling stocks. I know if you sell your stocks and somebody else buys them.

Lets say the stock xyz is at 10 dollars and crashes during the day and drops to 3 dollars. Will there always be a buyer in that situation? what happens if theres no buyer. Will your stocks always sell? if not what happens?

 

[Tarkus]

I'm new at stocks and have been reading up on them.

question is on selling stocks. I know if you sell your stocks and somebody else buys them.

Lets say the stock xyz is at 10 dollars and crashes during the day and drops to 3 dollars. Will there always be a buyer in that situation? what happens if theres no buyer. Will your stocks always sell? if not what happens?

Sure there will probably be a buyer for your stock. However if the stock is now worth $3 that is what you will get for it. You can put a minimum sell price on your stock but obviously if your stock is only worth $3 no one is going to buy it for $10. As a rule if your stock is one of the listed stocks, (DOW etc.), you just hold onto it and eventually it will be worth more than you paid for it.

There was a study a while back that showed that using one of the brokerage analysts did not result in better performance than simply playing the index.

Are you looking to make a lot of money in a short period of time? If so that is extremely risky game so you had better have the stomach for it.

 

[dcbogey]

Pokergod - That's a great handle if you are new and trying to make a quick buck in the market. It's the biggest casino there is! Having said that, it is a market and there will (almost) always be a buyer for any stock, but maybe not at the price you want.

 

[danmand]

The stockmarket is an auction market.

 

[stang]

Well how come I can't find a buyer for my Bre-X shares?

 

[ig-88]

who is Goober's stock broker?

 

[big dogie]

If you buy a small obscure stocks then you may have problems, liquidity is something you should diffidently have in mind when you purchase stocks it also makes for larger spreads...

b d

 

[oldjones]

Well how come I can't find a buyer for my Bre-X shares?

'Cause you're offering them on a stock market? Try a Comic Books and Ephemera Sale. You'd probably get a few bucks over the cost of putting them in a nice frame.

But to answer the OP's hypothetical. Like the man said, it's an auction, and if you ever saw movies of the trading floor, that's what all those shouting, waving guys were doing. If the market reports the shares are now worth $3, it's because someone recorded a sale at that price. That may have been to the very last guy willing/stupid enough to pay as much as $3, and when you want to sell, you may find no one's interested unless you drop the price even further. If you're not willing to, then you've found your buyer at $3. Just look in the mirror.

There are no sure things, 'cept being taxed and dying.

 

[emvee]

If you buy a small obscure stocks then you may have problems, liquidity is something you should diffidently have in mind when you purchase stocks it also makes for larger spreads...

b d

I think a lot of beginners make this mistake. Look at historical trading patterns, and if not trading often, check the bid/ask spread. Especially on the Venture or CNQ exchanges, you can see things like bid 5 cents/ask 5 bucks, last trade some date in 2006.