Say a share is 50c, but the sellers want 51c, buyers are offering 49c So I offer 50c, nothing happens, then the price goes up to 51c so sellers now want 52c buyers offer 51c and I never get in. then it goes up to 55c, sellers will take 55c but buyers want to pay 53c, I offer 54c and nothing happens. So it seems sellers mostly want the next cent, buyers want the cent less. If it's a share you want to buy then it's safe to assume you think it's worth the current price and will go up. So i'm now thinking, stuff trying to save the 1c to lose 2c, just pay whatever the current selling price or the next 1c up. Today I was trying to buy more MBE, like why wouldn't you, I bought it a month ago at 31c, today was trying to buy at 35c, ended up at 36c now the cheapest seller is 37c, so now I have to pay 2c more but could of got it at 35.5c if I had the order in at that. I can't see why not buy at the current price or pay 1c more just to get it if I feel that it's going to be a good investment. or buy a 1c stock for 1.1 and get it done. I reminded myself of back when I was buying bullion, refreshing the order page every minute to try save 20c and end up paying $2 more
Depends how bad you want it, or if you can set a buy-up-to price and stick to it. Buying "At Market" can also cause significant price moves in less liquid small-capitalisation stocks, so you need to watch that too. Also beware the 'shoulda-woulda-coulda' syndrome that affects gamblers of all types (including stock speculators). There is no 'perfect' deal, there will always be some risk that you miss out on the best buy or sell price. Maybe you screwed up today or maybe you dodged a bullet and will rejoice when you can buy in to MBE tomorrow at 20c. Nobody knows what's going to happen.
Beware of market makers front running your bids with "bots". It is actually quite common in lower liquidity markets. Makers can identify "real" trades entering the market and can adjust their own market prices via fast trading algorithms. For the uneducated investor it then presents as confirmation bias the market is moving in the right direction and many will then chase the price. Have a good read through this site :- http://asxinsights.com/
There's no general rule of thumb to this. Either buy 'at market' when you process the trade and hope for the best, or set a maximum you want to pay for the share in the first place, eg: if the asking price is 5c I will sometimes place a limit order 10% higher if I really want to get in, so at 5.5c because on the trading platform I use (Bell Direct) the system will always deal for you at best possible price at or below the level of limit order you set. So, I've placed orders like this and actually acquired shares for 5c-5.2c when the limit I set was 5.5c - does that make sense?
If you're unsure why nothing happens, the reason is that the 50c is the just the price of the last transaction. Everyone that wanted to buy and sell at that price have already done so, and are now out of the picture. (assuming their desired share quantities matched as well) The remaining players are those that want to sell @51c, and those that want to buy @49c. Nothing further happens until a new player enters and/or someone adjusts their buy/sell price to match someone else's sell/buy price. The deal is then made, and they drop out too.
Exactly. Trades are made based on the buy-sell spread, not the last traded price. Pay attention to the offer price (which will always be higher than the bid price). That's the cheapest price you will get the stock until a seller comes in with a lower offer. When you place your bid at 50c something does happen; your order enters the market and will remain there until it is filled, withdrawn or expires. If the bid price prior to your order was 49c or lower, you have also changed the spread by raising the bid to 50c - which may tempt a seller to meet you at that price.. if not, just amend your order to 51c if you want it Or order 'at market.' edit: same goes when selling; if the spread is 49c/51c a sell order at 50c will not be filled until a buyer comes in at that price.
