selling shares

freda11

My daughter wants to sell some shares, she has them held with ii investor. She has tried to sell them today and get a quote but it comes up error, stock market closed do you want to place a limit or market order. Not sure what this means?? Will the market be closed cos its weekend and be open on monday?

bowlhead99

The market is indeed closed at weekends.

If she selects "market order" it will join a queue for Monday morning and be sold at the best available price no matter what that price is.

If she selects "limit" she sets a limit on how much she would accept for the shares and the broker will try to sell them when the bid price is over that.

So for example if the price on Friday was 200p, and she does a market order, when the market opens on Monday she might get 200p or she might get 210p or 170p or whatever the price is by the time the broker can sell them. If she instead set a limit order of 199p, then the broker would still sell them at whatever price he can get over that but not below. So depending where the market opens, she might get 200p or 210p but she wouldn't take anything less than 199p.

The downside with the limit method is that if the market opens at 195p and gradually reduced to 180p she will still be stuck with the shares she doesn't want because the deal won't execute. She would then need to cancel the order at some point and try again for a market order or a lower more realistic limit.

freda11

Many thanks for your well informed reply. I think she will wait until monday.

freda11

not sure whats happened but my daughter has logged on to ii investor and it seems she placed a selling order, confirmed at 8am today and its now completed and they attached a contract note! Can this be cancelled? If not where does the money go?

bowlhead99

She probably selected to leave a market order when she received the warning about the market being closed when she was playing about with it at the weekend. So, they have executed the order as soon as practical at the market price after the market opened.

This is in line with their duty to give you 'best execution' for any order placed. You can't now say oh thanks for selling them but I'd rather not sell them I'd like to cancel - half an hour after they have written a contract with a buyer to sell the shares for cash at an agreed price.

The trade will settle in 3 days (i.e. that's when the shares will be physically given to the buyer and the cash will be received) but you can't pull out of the contract. The cash will arrive in her dealing account with ii and then she can withdraw to her bank if she wants. If she still wanted the shares, what she could do is go and buy them again with the sales proceeds.

She should be able to buy today, either for shares in this company or in another company, because she already have a contract note showing how much cash is coming in in 3 days time when the sale settled, and therefore that amount of cash ought to be available for a new 'buy' contract today which would also settle in 3 days time.

Of course, as the buy price might be a little higher than the sell price, and they will have taken a dealing fee out of her proceeds, you probably won't be able to afford to buy back quite as many as you just sold. But if you still want to be invested in that company, you could just buy back in.

I assume she doesn't want to buy back in because you said at the weekend she wanted to sell them and tried to sell them. So no harm done.

freda11

many thanks, was panicking that she had lost the money!

gkerr4

on III the funds from the sale will show straight away are "available to invest" as III allows you to re-invest funds before the 3-day trade clearing process.for example if she got £2k from her shares it will show as :

"Available to invest / withdraw; £2,000 / £0"

as she can re-invest the proceeds straight away, but needs to wait for the trade to clear before it can be withdrawn.