Will there always be someone selling shares?

[xen88]

Let’s say the market rate is at 1.20 & I set the purchase price to be that.. will there always be someone willing the sell?
also, since a lot of people probably are buying too, does it go accordingly to who places the orders first gets it?
When you want to sell say 10k of shares & only can sell 5k of shares cause no one bought your shares is that possible?

 

[Smurf1976]

Firstly, welcome to ASF!

What you are referring to is liquidity. In simple terms - how easy it is to actually find a buyer or seller.

For large cap companies with a very active market in their shares, there's no real issue since a huge number of trades take place. For example, looking at the 3 largest companies listed on the ASX and considering today's trades only:

CSL Limited (CSL) - 1,108,085 shares traded with 59,016 trades taking place.

Commonwealth Bank (CBA) - 4,976,671 shares traded with 58,562 trades

BHP Group (BHP) - 11,522,505 shares traded with 82,953 trades

Those are the 3 highest valued companies listed on the ASX and as you can see, there's a huge volume of shares being traded so no real problem.

At the other extreme, Sagalio Energy (SAN) has a market capitalisation of merely $410K, that's the entire value of all shares in the company at their current market price, and literally zero were traded today. There are zero shares currently for sale at the price of the last trade and for less than $11,000 you could buy literally everything that's currently for sale - with the not insignificant problem that you'd be paying 50 - 100% above the last traded price in order to buy anything at all.

Making even a small investment in SAN would thus be difficult since there are few buyers, there's only 1 at the current market price and 1 other at literally half that amount, and there are few sellers - there's 1 at 50% above the last price and 1 more at double the last price.

In contrast, you could buy pretty much any volume of shares in BHP without even the slightest difficulty so long as you're willing to pay the market price. 82,953 trades today alone, so that's almost 4 trades every second when the market's open, and the total value of BHP shares traded just today was $388 million.

Many investors avoid investing in any stock which has low trading volumes due to the above problems. In doing that they'll be looking at average volumes and few or preferably no days with zero trades taking place.

Anything within the top 200 companies as a general rule won't have any issues like that, it's the smaller companies where it's a more common problem.

 

[frugal.rock]

Let’s say the market rate is at 1.20 & I set the purchase price to be that.. will there always be someone willing the sell?
also, since a lot of people probably are buying too, does it go accordingly to who places the orders first gets it?
When you want to sell say 10k of shares & only can sell 5k of shares cause no one bought your shares is that possible?

The price of a stock is it's last traded price, it's not an indicator of the actual buy or sell offers, but generally should be close.

If you are a buyer, you're willing to pay 1.20, so you need a seller willing to sell at 1.20 for a trade to occur.

As a buyer or a seller, yes, you can end up with a partial order and trade taking place, if the trading action moves the price away from your buy or sell point mid order.

Buy or sell orders are queued, as shown in the DOM depth of market.
So if you enter an order, buy sell whatever, you are stepping into a queue. Hope that helps.

F.Rock

 

[tech/a]

In direct response

Let’s say the market rate is at 1.20 & I set the purchase price to be that.. will there always be someone willing the sell?

No not necessarily.
If you really wanted them place a buy at market and if they are available you'll be filled
If you didn't want to pay more than $1.20 place a stop limit order at $1.20 it can stay there until filled.
If you only want to buy if it reaches $1.20 or less then place a Limit order


also, since a lot of people probably are buying too, does it go accordingly to who places the orders first gets it?

Yes If your first in the queue at $1.20 and it trades there you'll be first filled.If there are already bidders at that amount
you'll be back of the queue.
If you want to jump the queue bid $1.21

When you want to sell say 10k of shares & only can sell 5k of shares cause no one bought your shares is that possible?

Yes if you place a sell at $1.20 for say 5000 shares and there are only 2000 shares from a buyer then youll be filled 2000
If then a seller comes in below you at $1.19 then your order will remain un filled until it trades at the higher amount or
you sell at a lower price.

I have used all.

 

[galumay]

Not uncommon in the illiquid microcaps where I invest, to see companies where there are no sellers.

I guess if you put in a high enough buy offer you might flush one out, but I know Commsec for one doesnt allow much spread from the last sale, so its not like you can offer 20% more to try to flush out a seller.