How do you sell stock immediately the next day?

[burst1]

Suppose you buy stock in a company and find out that something disastrous happened that would drive the companies stock down the next day. How would you issue an order to immediately sell the stock the next day at the price the market last closed at? I've been paper trading for a few weeks and encountered this problem with take two (TTWO).

I suppose a stop order would work, but if there was any lag for the order to process, wouldn't it sell for a rock-bottom price?

Thanks in advance

(and thank god i was paper trading :biggrin:)

[aiki14]

The short answer is you are stuck, the stock will open lower and that will be the best price you could get. You could, if your broker allows, make an ECN offer after market or premarket the next day, but whoever is on the other side will know what you know and you're not likely to get your price.

[burst1]

ah thanks, that clears up alot :D

so then what determines the price of the stock opening the next day?

[aiki14]

ah thanks, that clears up alot :D

so then what determines the price of the stock opening the next day?

In the old days the market maker for the stock would line up a trade, and would open the stock at that agreed price. That's still done for the big NYSE stocks (On CNBC or Bloomberg you'll see the reporters talking about a "post" where the stock is traded by the floor guys), but on the Electronic markets it is done by the computer which lines up the bid and ask from various buyers and sellers.

[MaryKay1965]

Burst1, this is what I would do: I would put in a "Limit" order to sell at the very least amount I would be willing to take. Then, if there is an order to buy your stock at more than you are asking, your stock should be sold at "Market" price. By doing this you are guaranteed to get your price or better.

However, I would not put my price in to sell "At Market", because there is just no telling how much your stock would sell for.

Of course you could enter your trade anytime you wanted, and your order will be entered as soon as the market opens.