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i bought a stock for .0002 and it went to (last price).0003 but i was told it wont sell until BID price goes to .0003 what is bid price and why doesnt last price and bid price equal. should i sell at same price to get out or wait
posted
Bid is the price that you can sell your stock at in other words what the market is willing to buy your shares at.
Ask is the price that you can buy your stock at in other words what the market is willing to sell you shares for.
Now in the all markets except NYSE there are middle men called MM (market makers) with NYSE you have the exchange floor. There are also brokerage houses that handle the buys/sells. They make their money on the spread between bid/ask. Think of them as wholesellers. They can't sell you the product for what they bought it for because they need to make money too. Now your broker is the retailer and they make money by charging a commission. So when you place a order to buy or sell your stock they have to go to these (middle men) to get the stock for you.
Now on the major exchanges including OTCBB you will see on the ticker last sell, Bid, and Ask. So it is easy to see what you can buy and sell your stock at. Remember you buy at ask and can sell at bid with the middle man be it the MM (market maker) or whoever makes there money on the spread.
But with Pinksheet stocks they do not list the bid/ask for you. All the list is last sell and that price is in the bid and ask in the ticker. The only way you can figure out what the bid/ask is is follow the sales. If you see a pinksheet with sells of .0002 and .0003 then the bid is probably .0002 and the ask is .0003. There are some companies out there like Alphatrade that you can pay monthly fees that will show you bid/ask on pinks along with level II's for pinks.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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posted
The previous replies are correct and I believe they have answered your question.
It is not as easy as you had thought to make a 50% gain. Stocks in the .0001 - .0004 range are there for a reason. It is true that a .0001 stock will make you 100% if you can sell it at .0002. It is very difficult to do though. With the Bid/Ask prices, a stock purchased at .0001 will probably have to reach a price of .0003 before you can sell it at .0002. Not many stocks make 200% gains very often. If you are lucky and the stock price does go to .0003, someone's sell order will surely go through immediately and the stock price (and bid price) will fall right back down. I think you will find that is is hard to make the quick profits that you had planned on. While your money sits there doing nothing in your .0002 stock, you could have made ten 10% trades and made 100%.
I used a .0001 stock for the purpose of explanation. You can apply this to your particular situation.
-------------------- All of my posts are based on my opinion. My opinions are based on the info available to me at any given point in time. Do your own DD and see if you concur. Posts: 820 | From: Phoenix | Registered: Jul 2005
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