market sell or limit?

[elvis]

as some of you have seen i'm pretty new here

i can learn fast, and i have much to learn about every aspect of investing. a simple question that i admitt i tried to sneak in on an off topic thread.

if i do a market sell will it execute right away? also, who am i selling to, are the shares going back to the company to redistribute at the price that i sold them back as?

if i order a limit sell am i selling this to another person, or back to the company?

pretty much i'm clueless now on who i'm selling the shares i own to, and confused due to what a broker told me that i'm selling my shares to other people when i was selling, therefore that leads me to believe that if i do a limit buy i'm buying these shares from other people?

some good reading material that can be recommended would be nice, or a simple explanation would due me justice.

just to add what i do know, with a market buy or sell it can vary largely, so i won't always get the buy price or the sell price, but with a limit buy \ sell order i will get the price i request if either bought or sold.

i've been able to execute limit buys, but today i tried to sell (:D) and that is the most important thing lol, and i couldn't execute it..

[Weirdharold]

Elvis,
I am not the most knowledgeable person on this board, and probably one of the least knowledgeable, but I am going to give you an answer for the questions you asked.

There is never a guarantee a sell will take place ... for a sell to happen there has to be someone willing to buy... it is not a normal transaction for a company to be buying a stock back... so you are selling to someone else.. be it another individual, speculator, or institution etc.... it is someone that believes the stock you are selling is going to have greater value at some point in the future.

A limit sell is saying that you will sell at "X" price or above,but not below it. Just like a limit buy is saying I will pay "Y" much or less but no more.

So pretty much when you set a limit sell you will get price you wanted or a better deal for you.

A market sell will get you what the first person that says they will buy it is willing to pay.

Hope that helps....

[elvis]

hmm so how the hell do you sell your shares? sound impossible!

man this is a little bit confusing and sounds like it'll be hard to get rid of some shares. i honestly was under the impression that the shares would be bought back by the company, i guess i was misinformed.

my setup is this, i got in at .0001, it went up 100% a few times in the day (.0002). so i set a limit sell order at .0002.now if i got it right what you say, i'd have to wait to be able to sell if someone decides to buy at .0002. seems impossible, is it?

if i'd do a market sell then as soon as someone decides to buy at the ask price which is what my stock is worth at the given time, my shares will go instantly i'd think?

[Ciao]

Hi Elvis
Rather me to explain it to you (problem with lingo) go to the SMC school forum (the DD info)and you will find a lot answers to your Q
read this on MM
http://www.stockmarketcats.com/showthread.php?t=14

good luck

[CatFish]

i buy at limit and sell at limit only unles it is a blue chip. only time i will sell a penny stock at market is when i just plain want to get rid of it and could care less what price i get which i have done more then once

[lovemoney]

Elvis, generally, it's not a good idea to market sell on pennies because you run the risk of buying or selling at a price that is way out of the range you expected because the price moves so fast and so extremely at times. (and because MM's are more free to play their little games on pinks etc.). You may end up buying higher than you wanted or selling lower than you like. In fact, Scottrade is an example of a broker that won't allow market orders on pinks or OTCBB stocks for that reason. I've tried and it always gives me that message. It only allows limit orders. A limit sell is safest on those penny stock transactions even though they may take longer to execute. Sometimes hours, sometimes days...Sometimes never, lol. One of the risks associated with pennies I've encountered, is not being able to dump a stock just when the time is right. Grrrr, lol. So I'd miss a profit. Sometimes folks will have to put an order in for a "good till canceled" time period before it will go through.

Larger cap stocks on the other hand with big floats etc are good to put a market order in. They will execute right away and because the price doesn't move as fast, you'll get a price at or right near the range it's at.

[elvis]

thanks cats for the informative responses, lovemoney your post was what i was looking for basically. so to make a profit on a penny stock it sounds like it can't really be done with a 'day trade' style.

i'm interested in what i can do in one day, seems like penny stocks won't give me the quick buck like i expected. what price range in stocks should i be looking at to succesfully day trade? yall know this lol, open and close a position in one day... sounds to me how you (lovemoney) explained it is that a higher price per share stock will sell faster when one puts a sell order on it. (is that true or did i misunderstand?)

also what would be something i can look at to forecast that i'd be able to day trade a penny stock succesfully?

you guys are the best btw, i'd be misinformed and a lot more ignorant without this forum

[lovemoney]

Elvis, the cats would probably be more apt to give you the scoop on day trading. I think the brokerages have day trading accounts with discounted smaller fees because they make so many trades in a day. Some people would go broke daytrading using standard fees I would think, lol. But as has also been said, you have to have a minimum $20,000 or so in your account to daytrade.

As far as the price range of a stock, I don't really know that that matters so much in regards to how fast a stock will buy or sell on a limit, but rather the volitilty of how the price moves during the day is more the point. if you put in a buy limit order at a certain price and that stock is going up in price, it may never come down to the level you want to buy at because it's moving up so fast. Then again, I hear people hear talking about how the MM's play around with traders on these pinks too. Also, it seems somebody here told me orders are filled on a first come first serve basis.

Some stocks are generally more volitle because they have a lower float alot of times. Meaning, less shares are available on the open traded market among people trading them as compared with large cap stocks which would more likely have a high float. So, the price is gonna fuxuate and move fast on a low float stock. Sort of like trying to hit a moving target at times. Less shares being traded means it doesn't take much to move the price alot when people trade them. On a large float stock, the price may move slower. So, if the price is at X, then you may put in a market order and the the price will still be at X or near it when your order goes through.
That's what I meant when I said placing a 'market order' on a penny is dangerous somewhat. My understanding is many are low float stocks. The price may be at X, but if you put a market order in, it may move quickly to who knows what when your order executes and you'll get in or out of a stock far above or below the price that you intended. Limit orders safeguard you against that happening.

My info may not be exactly perfectly accurate but the cats and some others could explain more.

[Weirdharold]

Hmmm Elvis, I am trying to think where to direct you to begin your education.... My first thought was Here at Ice Cold University, but maybe that would not be where to start you out... I think maybe you would do better starting Here with investing 101 at Investopedia

Hope this will help you out, and Good Luck with any trading you do.

[lovemoney]

Elvis, you might try reading this. It gives a detailed explanation of the pros and cons and differences of using limit orders vs market orders.

Limit orders vs market orders