question about limit orders

[cramerica1972]

how much above the bid price should u buy a stock?

[aiki14]

how much above the bid price should u buy a stock?

I am not sure I understand your question. If a stock is trending down you should get in on the bid price, trending up the ask, generally speaking. I try to have a good reason for a particular price, set a limit buy and let the price move to it. If it doesn't I figure out why if I can and move on.

[cramerica1972]

I am not sure I understand your question. If a stock is trending down you should get in on the bid price, trending up the ask, generally speaking. I try to have a good reason for a particular price, set a limit buy and let the price move to it. If it doesn't I figure out why if I can and move on.say apple bid price is $95 what then?

[aiki14]

say apple bid price is $95 what then?

I am still not understanding. I don't think the bid price is important for determining at what level to get in.
If AAPL is bid at 95 and I am looking for it at 93 I put i my order at 93 and if I get it on the bid or the ask only matters in the trend.

[bahroor]

I think hes asking about the bid/ask spread before considering a position but I'm just guessing. The question is very vague, need more info!

[Luc1Grunt]

I don't trade anything with a BxA more than $.05 especially in a low volume stock. Only exception is at the open you will see this with the big dogs....and that is where I make my daily dough. Look at a 1 minute of QCOM from 930-1000 on Monday. Normally a stock will stabilize after 1000 and the BxA will reduce to $.01 to $.03.

[Rich]

For clarification, allow me to post the definitions:
From Stockcharts.com

ASK Also known as the "offer", the price that the market maker guarantees to fill a buy order. A buy order placed at the market will usually be filled at the current asking (offer) price. The ask price is usually greater than the bid price

BID The price at which the market maker guarantees to fill a sell order. A sell order placed at the market will usually be filled at the current bid price. The bid price is usually less than the ask price.

Limit Order An order to buy or sell a security at a specific price. As opposed to a market order, limit orders might not be filled immediately if the market moves away from the specified price

Market Order An order to buy or sell a security at the prevailing market price. Sometimes referred to as "at the market", these orders are usually filled immediately by the market maker. A sell order placed at the market will most likely be filled at the bid price and a buy order will be filled at the ask

The Ask and Bid are related to "market" orders and not "limit" orders, so I don't see how they are connected in any way unless you look at the "bid" or "ask" and then place a market order. But why would one do this?

I believe Cramer stated never to use "Market" orders, they will hurt you.

Rich

[gotcramer?]

hey Jimmy, you rascal

[zyzzyva57]

A minor point, but the reason you do not buy at "Market" is thinner the volume on a stock the more danger is you may buy/sale on an abnormal spike in either direction

For example, with Google the sheer volume of the stock drowns out the ability for spikes, though the potential is still there

With one of Master Cramer's small drug stocks dependent upon one drug in Phase III Clinical Trials you can get nailed major hard out of the blue by the FDA without a trailing Sell Limit plugged in to catch a plummet

[Rich]

Excellant points, and believe it or not, I actually knew this small fact ! LOL So, I am making progress for an old man :-)

BTW, I've wondered how some here have come up with the names they use to post with. Yours is most interesting. What the heck is all the zz's and stuff? Is this something you young kids are using as code or something :-) I can understand "Rich" but some of these names amaze me ? I must be getting old

[zyzzyva57]

"zyzzyva" is a South American bug and the word is usually near the end of a dictionary

The "57" has no significance other than it is not divisible

Oh, I just like the letters "z" and "y," dah :)

Oh, oh, I am no kid by a long shot

Of course, everything I write could be lie, but then that would be true, never mind...

Sorry, "zyzzyva57" has no significance to the real world