I’m totally new to this…and planning to start out small of course. So far all I really know is to buy the stocks when they are low..and then when they rise you sell them. Ok, you are going to laugh..but again I am new and learning. When you "sell" the stocks does someone have to buy them? Or does it work like this: 2 weeks ago you bought 30 shares at 5.40 each. Today 2 weeks later they are at 7.13..So I can make a good beginner profit..so I click a button that says sell/trade and within a few minutes I have now made a profit of .90 (7.13-5.40=1.73…. 1.73X30=.90)…is that how it works? Or does someone have to buy them? When they say trade stocks they are not talking about trading a stock for a stock…right? they mean stock for money..lol again I am new! Thanks! =)
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Yardbird 10th March 2010
You understand the process fine. Yes, when you sell a stock there has to be someone who buys it. But don’t worry about that. There are always buyers out there, if the price is right.
When you buy or sell a stock on scottrade or wherever, you can do a market order or a limit order. With a market order, you buy or sell the stock for whatever the going rate is, whatever a buyer or seller is willing to give.
There’s something called the bid-ask spread. For most stocks it’s only a few cents. Let’s say Exxon (EOM): $70.41 to $70.45. That means if you sell, you get 70.41 and if you buy (with a market order), you pay 70.45. Sometimes the price is changing rapidly, so if you want to make sure your order is executed, use a market order.
There’s also a "limit order" Say I won’t sell my stock for less that $80. I put in a limit order, and my order won’t be executed unless there is a buyer willing to pay my price.
When you get into stocks that are traded "over the counter" or pink sheet stocks, then finding a buyer can be hard; but even then it’s always just a question of finding the right price.
Good luck! The best way to learn is by doing. But there are some good websites and books that can help too. See the links here:
Al in NC 10th March 2010
When you sell your stock someone else buys it and the cash from the stock sale is credited to your brokerage account.
You would not profit $51.90 since you must subtract the buy commission, the sell commission and any fees (such as a Regulatory Transaction Fee).
Scottrade has a "Tutorial" and webcast available to customers.
Here are some good websites for beginners:
http://www.investopedia.com/university/buildingblocks.asp
http://education.wallstreetsurvivor.com/beginner
http://www.etfguide.com/etfeducation.htm