Shares: buying/selling differences

GettingItRight

Hi all,

When I was 18/19 (roughly 11 years ago) I went through a phase where I was buying and selling shares online. I am thinking about doing so again much later in the year, perhaps 2011. Until then am going to start reading up again on buying and selling shares.

Maybe someone can answer a question I have, as there was something I could never understand about my online broker (forget the name of who it was). Any help is greatly appreciated

The problem I used to have was having bought shares online and wanted months later to sell them, I found that the price offered did not reflect the current market price. This presented a problem when wanting to take a profit (minus commissions), as I was always offered the old value price.

I know there is always a difference between the buying/selling price, but it seemed that the selling price was never up-to-date even though there had been a big price jump in the share value, either much earlier that day or the day before.

Is this typical of share dealing? When wanting to sell, is it not possible to get an updated price rather than an old value, after a the share value suddenly jumps in value?

atypical

GettingItRight wrote: »

I found that the price offered did not reflect the current market price...I was always offered the old value price.

Which broker were you using? They'd be very odd if they only let you sell at the price you paid. Defeats the purpose really.

turbobob

Odd question!! If you put in a "market" order the broker is obliged to get you the best available quote at that moment in time. Share prices move around continuously so if you are looking at out of date information (e.g. yesterdays prices, or prices from earlier in the day..), do not be surprised if the price you get is different from what you are expecting.

There are different order types you can use though (depending on what the broker offers). The above mentioned market orders buy or sell immediately at the market price. Your order will be filled, but at an uncertain price. Limit orders on the other hand, allow you to specify the price at which you will buy or sell shares, i.e the maximum price you will pay for a share or the minimum price you will sell them for. But there is no guarantee that the order will be filled.

GettingItRight

A big thank you for your responses. Sorry if the situation mentioned seemed a bit daft

I have a feeling it was TD Waterhouse I used, although it was 11(ish) years ago and this is only stockbroker name I remember. Whoever it was gave me a free unexpected mouse mat as well, but I guess many did that sort of thing.

When I used to try and put an order in to sell the shares, the selling price it quoted was outdated against recent rises in share value. By outdated, I mean either from earlier that day or on a previous day. I guess is it a little hard to explain easily.

It clearly was my fault for jumping into the shares investment idea without properly reading up about stockbrokers first. I still have two books by Malcolm Stacey (Armchair Tycoon and Poolside Tycoon) mostly unread. I might try to read them soon and perhaps get a few more books on the subject.

turbobob

Prices update every second the market is open though, and not in a straight line. These days you can look up live prices from various websites though.

If you are dealing with penny shares, these can have big differences (in percentage terms) between the bid and offer prices.

Nosht

Online dealers sell at the time the request is made to them & the documentation shows the time, date & sale/purchase price as well as the monies, tax & commission due. You must have enough money in your account to finance the purchase & your account is updated almost immediately with the sale proceeds.
Normally you have 10 seconds or so to take the price else it is timed out & no deal is made so just make sure that you have your wits about you & do not press the wrong button.

Regards,

N.

tradetime

Alternatively you could have a proper 21st Century broker that provides you with at the very least streaming real time Level 1 quotes so you can see the live bid / ask price, assuming of course you felt you either wanted or needed it..
I make this point simply because I get the feeling that retail customers in the UK seem to think or accept that they have to be accepting some brokers offer on some 10 second website deal, and as long as the UK retail client continues to accept this, then nothing will change, since it is not in any brokers interest to change it, quite the opposite.

cloud_dog

GettingItRight wrote: »

When I used to try and put an order in to sell the shares, the selling price it quoted was outdated against recent rises in share value. By outdated, I mean either from earlier that day or on a previous day. I guess is it a little hard to explain easily.

Are you sure you bought shares (stocks / companies) and not unit trusts?

GettingItRight

Hi all! Big thanks for the replies, greatly appreciated

I admit alot of the shares that I bought and sold were penny shares, with some exceptions. I cannot remember too much detail about the account I had, but it was a shares account. I remember receiving a dividend payout with one of the companies.

Thanks again for your help. I think I've been a little too vague and should really have thought more before creating the thread, as I little recollection. Sorry

tradetime

If you are an infrequent buyer and seller of shares, consider a site such as Interactive Investor often referred to here as iii. There are no management fees, flat rate trades of £10 for UK listed shares, and a portfolio builder option that reduces the cost further

GettingItRight

Thanks will take a look