3 ms·

One thing is not clear. If person A has 10 items and asks for $10 per item and person B wants only 7 items for $10 per item, what happens? Person A just sells t

by Foivos 5y ago

One thing is not clear. If person A has 10 items and asks for $10 per item and person B wants only 7 items for $10 per item, what happens? Person A just sells the 7 items and then waits for somebody else to pick the remaining ones? And vice versa what happens if someone wants to buy more stocks than what is offered?

rcar1046 5y ago
Generally...he'll have to lower the price on the remaining 3 shares to sell them it looks like as there was only demand for 7 items @ $10. Or he can simply wait until someone values them at $10. Conversely, if someone is willing to buy more than is available, people will probably make more available, just at a higher price.
herodotus 5y ago
When you place a buy or sell order, you can specify "all or nothing" if that is what you want.
vishnugupta 5y ago
I suggest reading up Market Maker [1]. In most scenario (assuming good demand for the stock you are buying and a functional market etc.,) a market maker, looking at their order book, buys 7 items from A. They sit on it until they are able to dispose off them to a buyer. In effect, you, as a buyer is buying a stock from market maker. Most of the equity market is not P2P but mediated by market maker. They take the liquidity risk (i.e., holding a bad stock if demand plummets) and are rewarded for that by making money off of every transaction through bid-ask spread. Of course I'm greatly simplifying as an equity order goes through a bunch of intermediaries but Market Maker play a central role here. [1] https://www.investopedia.com/terms/m/marketmaker.asp https://www.investopedia.com/terms/m/marketmaker.asp
kbuck 5y ago
The orders are partially filled (either on the buy or sell side). What this means is that the shares eligible to transact do so immediately, and the remaining shares sit on the order book and wait for someone to be willing to trade at that price. There is a specific option that you can set (usually called "all or none") that will prohibit partially filling an order and only allow it to execute in entirety.

by Foivos 5y ago

rcar1046 5y ago

Generally...he'll have to lower the price on the remaining 3 shares to sell them it looks like as there was only demand for 7 items @ $10. Or he can simply wait until someone values them at $10. Conversely, if someone is willing to buy more than is available, people will probably make more available, just at a higher price.

herodotus 5y ago

When you place a buy or sell order, you can specify "all or nothing" if that is what you want.

vishnugupta 5y ago

I suggest reading up Market Maker [1]. In most scenario (assuming good demand for the stock you are buying and a functional market etc.,) a market maker, looking at their order book, buys 7 items from A. They sit on it until they are able to dispose off them to a buyer. In effect, you, as a buyer is buying a stock from market maker. Most of the equity market is not P2P but mediated by market maker. They take the liquidity risk (i.e., holding a bad stock if demand plummets) and are rewarded for that by making money off of every transaction through bid-ask spread. Of course I'm greatly simplifying as an equity order goes through a bunch of intermediaries but Market Maker play a central role here. [1] https://www.investopedia.com/terms/m/marketmaker.asp https://www.investopedia.com/terms/m/marketmaker.asp

kbuck 5y ago

The orders are partially filled (either on the buy or sell side). What this means is that the shares eligible to transact do so immediately, and the remaining shares sit on the order book and wait for someone to be willing to trade at that price. There is a specific option that you can set (usually called "all or none") that will prohibit partially filling an order and only allow it to execute in entirety.