hello, im new here with a simple question

[sanaa1971]

well hi my name is Sanaa
I have read a lot about stocks and how to invest and all sorts of stuff.
I am really interested in the penny stocks and its a great place to be at.

My question is will i lose my stock if it goes below what i bought it for.
for example, Circuit City stocks are for $10.89 and i buy 100 of them
and then a week later the stock goes below $10.89 to $8.49
will i lose my stock or will i just lose my stock worth?

[aiki14]

well hi my name is Sanaa
I have read a lot about stocks and how to invest and all sorts of stuff.
I am really interested in the penny stocks and its a great place to be at.

My question is will i lose my stock if it goes below what i bought it for.
for example, Circuit City stocks are for $10.89 and i buy 100 of them
and then a week later the stock goes below $10.89 to $8.49
will i lose my stock or will i just lose my stock worth?

You would lose the value of the difference or $2.40 per share or $240 for your example. You would of course have to sell it to "realize" the loss.

Please take my advice and continue to read up on investing before you put your money at risk, and reconsider your interest in penny stocks, they are a trap for beginners.
Good Luck

[sanaa1971]

thank you for that.
so if it went down to $8.49 ill lose $2.40 for share.. but when it goes up my share now is worth more because it went up.
i am not going to invest a lot on penny stocks. i am just trying it out on a low low amount. I will never risk a lot without trying it out and learning about it.


i have another question. so for example i buy a penny stock for $0.10 and i buy 100 shares. then it goes up to $1.00 when i want to sell it, does it sell right away for $1.00 or how does the selling go after i want to sell my shares. does someone buy them from me or who do i sell them to?

[CSSVT]

For every seller there has to be a buyer and vice versa. For example take ticker symbol TJKE (Just random letters for example purposes). If TJKE is bought by you at .10 with 100 shares and rises to 1.00 (gain of 90 dollars) and you wish to sell but no one feels that that stock is worth 1.00 then you may not be able to sell it at that time. But say you buy symbol SYDD (more random letters) for .05, 100 shares, and it goes up to 2.15 (gain of 210 dollars) and someone else thinks it's worth that or more then they'll buy it off of you at that price. Keep in mind that some, if not all, brokers will split up your order if need be so if you sell all 100 shares of a company and only 50 shares are being requested to be bought then you may have to sell them in portions over time.

Keep in mind that in my example listed above, that is only generally the case when it's a company that doesn't move a lot of volume in a day.

I know that sounds jumbled but let us know if you still don't understand and someone can probably give a more simple answer.

Honestly? My advice to you would be to read up on some beginner books as this is stuff they will cover. I'm assuming you're planning to buy and hold so you really should be in no rush as the market will probably continue it's downward trend in the time it would take you to buy and finish that book (it'll be up some and down some but not really gaining anything overall). If you're at a college, their bookstore should have some good selections for learning the market, if not just try barns and noble or Books a million.

Good luck.

[aiki14]

Sanaa, consider buying Toni Turners "A Beginners Guide to Short Term Trading"
No offense, but your questions indicate you may be looking to put real money at risk before you are ready. There are many lessons one can either learn for free or at great price, make your first investment decision to do the former, it'll most likely be a while before you make a more significant decision.

[sanaa1971]

thank you guys for those answers and they have been great.
yes i am new to the business and I'm not in a hurry right now I'm just learning how it works and i what i need to know in order to be successful in this business.

what other books would you recommend me for starters?

i am practicing with virtual reality stock market which is basically live but with fake money.

[GlenQuagmire]

thank you for that.
so if it went down to $8.49 ill lose $2.40 for share.. but when it goes up my share now is worth more because it went up.
i am not going to invest a lot on penny stocks. i am just trying it out on a low low amount. I will never risk a lot without trying it out and learning about it.

i have another question. so for example i buy a penny stock for $0.10 and i buy 100 shares. then it goes up to $1.00 when i want to sell it, does it sell right away for $1.00 or how does the selling go after i want to sell my shares. does someone buy them from me or who do i sell them to?

I have a similar question, since I am in the same boat as Sanaa1971. Plus I also am practicing with virtual reality stock market. The only bad thing is about the virtual reality stock market is that it has a 15 to 20 minute delay in making a trade, though you have options to buy/sell at market price or a limit price, with an option for stops. Yet with a 15 to 20 minute delay and looking at how a heavily traded & high volume stock like Circuit City (for example) fluctuates throughout the day, I am wondering how long would it take to sell 1000 shares of Circuit City in "real time" with "real money"? In my example, taking the data from this past Friday (10-10-08), Circuit City (with an average volume of 3,434.470) opened at .45, had a low of .35, had a high of .50, closed at .37, and had a volume of 7,386,000. So based on this example, if I wanted to buy and sell 1000 shares on Friday, about how long would it realistically take me to buy and sell these stocks in real time (based on my buy and sell order example below)?

In my case, I would have put in a limit to buy at .38. ($380 to buy 1000 shares) I would have put in my limit order on Thursday night (10-09-08).

Then I would have put in a limit to sell at .48, as soon as I had the 1000 shares purchased. In order to get back $480 from the sell (not including broker fees), then walk away with a $100 profit. So am I correct? Since the market dropped less than my buy price of .38 (the low of the day was .35), and since the market went above my sell price of .48 (the high of the day was .50).

So based on all that happened with Circuit City on Friday, would I have been able to easily get my buy and sell orders executed (without any delays to capture both the down swing and up swing of that stock on Friday)? Mainly I wanted to use Sanaa1971 example somewhat, so I can have an idea of what to expect with trading stocks in general (in real time, without a delay). So would I be able to buy and then later sell 1000 shares right away (with this high volume stock)? :confused2:

Glen

[CSSVT]

Glen, have you decided on a broker yet? Think or swim offers a paper money section of their desktop platform that gives you 100,000 (or is it 10k?) in funding and 3 day trades to learn investing, strategy, and how to use their software. I suggest checking it out and seeing how you like it as while there's a lot of paperwork (digital paperwork) you're not required to load any money into your account to use it. Everything you can do in their normal mode you can do in their paper money mode including watch lists, and analysis.

[GlenQuagmire]

Hey there Cssvt. Thank you for your input. No, I have not decided on a broker as of yet, however I did check out "think or swim" several weeks ago, but I opted not to get a paper trade account with them, because they require you to sign up as if you were opening a real account and they require a TON of extensive personal information (i.e. your home address, telephone number, social security number, etc. etc. etc.). I even contacted them to see if it was necessary for me to provide all of my personal information to them just to open a paper trade account, and they told me "Yes.", otherwise they could not open an account for me. So I am not keen on giving out any of my personal information just to open a paper trade account, so I had to pass on "think or swim".

However based on the example I gave in my original posting, I mainly just wanted to find out from some of the Seasoned Traders in this forum about the reality of my example to make a profit if it were done in "real time" with "real money" . . . or would there be some other unforseen delays or problems that would make my example a bust. Since timing is everything when it comes to trading, I just wanted to find out if my trading odds would greatly improve in "real time" vs. the delay in virtual trades (via using a paper trade account that is usually delayed 15 to 20 minutes behind "real time"). Whereas if a "real time" order meets the criteria to buy or sell, I think it should be executed in seconds, not 15 or 20 minutes later. :confused2:

Glen

[MaryKay1965]

Sanaa, consider buying Toni Turners "A Beginners Guide to Short Term Trading"
No offense, but your questions indicate you may be looking to put real money at risk before you are ready. There are many lessons one can either learn for free or at great price, make your first investment decision to do the former, it'll most likely be a while before you make a more significant decision.

Aiki recommended an excellent book. This is a "must read."

Also, check out http://www.investopedia.com. This site has a TON of info.

[Florida]

Hey there Cssvt. Thank you for your input. No, I have not decided on a broker as of yet, however I did check out "think or swim" several weeks ago, but I opted not to get a paper trade account with them, because they require you to sign up as if you were opening a real account and they require a TON of extensive personal information (i.e. your home address, telephone number, social security number, etc. etc. etc.). I even contacted them to see if it was necessary for me to provide all of my personal information to them just to open a paper trade account, and they told me "Yes.", otherwise they could not open an account for me. So I am not keen on giving out any of my personal information just to open a paper trade account, so I had to pass on "think or swim".

However based on the example I gave in my original posting, I mainly just wanted to find out from some of the Seasoned Traders in this forum about the reality of my example to make a profit if it were done in "real time" with "real money" . . . or would there be some other unforseen delays or problems that would make my example a bust. Since timing is everything when it comes to trading, I just wanted to find out if my trading odds would greatly improve in "real time" vs. the delay in virtual trades (via using a paper trade account that is usually delayed 15 to 20 minutes behind "real time"). Whereas if a "real time" order meets the criteria to buy or sell, I think it should be executed in seconds, not 15 or 20 minutes later. :confused2:

Glen


In the example you have given, it is very likely that you would have been filled on both your buy and sell orders that you indicated in your initial post. This is based on the number of shares sold at or below your limit price on Friday, and the subsuquent number of shares sold at or above your sell limit price indicated. It would depend on the routing of your broker, and the efficency of their platform. The purchase at .38 limit would have probably not been an issue, as the stock traded at this price for almost a 30 minute period of time. The sell at .48 would be more problematic as it only traded at this price or above for a couple of minutes. This is where the efficiency of your brokers platform would be in question. A limit order will guarantee your price, but will not guarantee a fill, if you follow what I am saying.

Now, if it were just that simple to pull in a 25% profit before commissions everyday, on every trade. If your broker allows a OSO and then an OCO placement, you could place the order to buy at a limit of .38, and then the system would immediately place a OCO to sell at a limit of .48 and also give you an option of putting in stop price if you wanted. This way, you are sure your sell order gets placed as soon as your buy order is filled. Otherwise, if you are not able to monitor the trade very often, you won't miss the chance to sell if it hits you goal. On the example above, you would have been filled at about 11:15 AM. If for some reason, you would have not been able to look at the trade and enter your sell limit until 15:50, you would have missed your chance on Friday, and it has not been that high since.

The next thing to consider is how did you pick your buy price of .38? Did it just look good the day after when you looked at the chart, or would you have actually had a reason to place the buy order at that price? The same holds true for your selling price, did it just look good on the day after, or would you have had a valid reason for setting it at a .10 profit?

Again, if it were just as easy as picking a stock, then picking a buy point at random, and a sell point at random, then throwing the orders in and letting it ride, we could all be rich!!

At least with this stock, you could not have lost too much, even if it went to zero, (unless of course your entire trading account is put in this one trade.

Good luck with your trading, and please take the advice given above and read everything you can. Then, when you are ready, you must make real trades to get the feel, simulated trading will not give you the real story both from an execution basis and an emotional basis, (it means a bunch more when you have your real money on the line vs. fake money).

[GlenQuagmire]

Thank you Florida. I greatly appreciate you taking the time to thoroughly review and evaluate my example. This means a great deal to me, while getting your opinions and advice. Though I am a Newbie and have been trying to learn about trading for several months now (while paper trading all along) in various online stock/trader forums. For sure, you certainly have provided me a lot of great food for thought and have exposed me to new aspects of the market that I have never encountered before . . . i.e. I did not know that there was a way to view the complete daily movement and price data on a stocks as you have described . . . i.e. knowing the ongoing trade prices of Circuit City each time the trade price changed (going up or down) and for how long it stayed at each trade price. WOW!!! I had never heard of this before, yet I just found that Yahoo Finance has a chart to view all of this information. COOL!!! For sure, having information like that would be a great tool to have while researching stocks. Now that you have made me aware of that chart, I certainly look forward to using it in the future.

In my case, since Sanaa used Circuit City as an example (when this thread first started), I basically wanted to piggback my question and example onto Sanaa’s, since the question came up about how long does it take to sell stock. In my case, since I use a virtual trade account as well (for my paper trades), I mainly wanted to provide an example of what a "real" trade might be like vs. paper trading . . . with an emphasis on how long would it approximately take to buy and sell in "real time" (using my example and figures). Yet I am very sure that using real money vs. paper trading is very different, due to "real" money being used, and "real" emotions being used. Which I have always been taught that since the first day I started learning about trading. However the main point of my example was more about the "nuts" and "bolts" of the reality of getting buy and sell orders executed vs. delayed paper trade orders. Yet based on your evaluation of my example, it sounds like it could work as long as my limit prices are met (when buying and selling), as long as the price holds long enough to execute the order AND as long as there is a seller or are sellers AND as long as there is a buyer or are buyers to execute my orders (based on the amount of shares involved)?

In the case of my example, it was established solely to try to get a $100 profit out of the buy and sell trade, and no more (so this example could have been used for almost any stock). The stocks that I currently paper trade, I have already previously researched them in great detail, figuring that they would be ideal candidates for swing trades due to their high average and daily volume along with watching how their prices swing throughout the day (when the market is in an up trend). Yet it was very enlightening to learn from you about the behind the scene processes that take place that are very important factors to be considered when it comes to buying a selling (i.e. the routing of my broker, the efficiency of my broker’s platform, etc.). Yet I greatly appreciate you bringing all of this to my attention, as I was not aware of the short times that stock could trade at a higher price and then never return to that price that day . . . thus allowing only for the order to partial fill or to not be filled at all.

I will make note of your advice about a OSC, OCO, and adding a stop. This advice is PURE GOLD!

In regards to picking my buy price, well since I figured that Circuit City would drop below the opening price at some point in the day (even though this stock was on a down trend on Thursday and Friday last week), I figured I would guess an amount below what I would guess what the opening price "might be" (upon evaluating the recent history of the trade prices of the stock). In regards to picking my sell price, I would just add enough to my original buy price so I could get at least a 10 cent per share profit "if" my limit order to sell would successfully be executed. Mainly, I am trying to make a profit from the low and high movements of the stock, if possible (based on the number of buyers and sellers and how long the price holds to enable my limit orders to be executed). From some of my readings, I heard that it is a good idea to try to trade high volume stocks (i.e. 1,000,000+ per day), to try to make buys and sells more likely and easier to happen. Since I want to make some money in the market, I am not greedy. I more interested in taking a risk on a small profit, rather than to take a higher risk to try to get a large or huge profit. If the example that I provided looks like it could have worked, then I would have been happy walking away with a $100 profit (before broker fees) from just doing one trade like that a week. When it comes to trading, I am not looking to get rich or anything. If I can make at least $50 or $100 extra each week, then I will be totally satisfied. Yet I know that I will have to do a lot of research and studying just to get that to happen, yet I think that it would be worth it. In regards to my setting my profit at 10 cents per share, well it seems that the chances are better to buy and sell (based on all of my paper trades at least) AND make a small profit, when I do not seek to make a killing on a trade. So I would rather try to walk away with at least some money/some profit than no money/no profit when it comes to trading. Yet I do not pick my stocks at random and nor do I randomly pick buy and sell points . . . as I base my trades entirely on my prior research of a stock, the current trading history of the stock and when the stock is in an up trend.

Now in the case of Circuit City, personally I would not have brought it on Friday, because it was in a down trend on Thursday. I am one of those people that like to take advantage of a stock when it is in an up trend. Plus diversification is key to successful trading I think, and I think that it is best not to put all of one’s money in one stock. Yet with the way the market had been down so much prior to last Friday, I would have been at a loss as to what stock to trade since the market has really been tanking a lot lately.

Thanks a MILLION Florida, your help means a GREAT-GREAT-GREAT deal to me!!!

Glen