Date: August 11, 2017
Daily share prices in the stock market are determined by market forces of supply and demand. In the long term, share prices are influenced by economic and political events, both at home and abroad.
Can I tell my broker at which price I want to sell or buy shares?
Yes, but because the price of shares depends on market forces of supply and demand, there may not be a market at the price you want to buy or sell.
For example, should you place a buy order for share X at $2 when the best bid (buy price) for that share is $2.20, you are unlikely to find a seller who will sell at your price.
Conversely, should you want to sell share Y at $3.50 when the best ask (sell price) is $2.80, you are unlikely to find a buyer who will buy at your price.
What happens if I want to sell shares and nobody wants to buy them?
If the trading system cannot find an immediate match for your order, that order will be automatically stored in the computerised trading system until a buyer and a seller can be found. For example, should you make an order to sell share X at $2, it would be matched against an order to buy share X at $2. If there is no order to match the price, the order is added to the list of other buy and sell orders, which are held according to a price, and time, priority system. This system ensures that orders which offer the most attractive price are processed first. If two orders offer the same price, the order placed first will take priority. However, all unmatched orders will expire at the end of the trading day.
