I was wondering how effective is the last trade. When you sell a stock does somebody have to buy it? Or is it just an exchange of capital based on the price? My broker always executes my trades a penny late. Is this true with all brokers or could I get a more competitive deal?
Last trade
- Thread starter Scalperten
- Start date
Do you mean that you submitted a market-on-close sell order and got filled at a price different from the close at 4pm Eastern time, or do you mean that you looked at the last trade price in the midst of the trading day, submitted a market sell order (or, more sanely, a limit sell order with a limit price somewhat below the last trade price), or do you mean something else?
If you meant the latter, the last trade price is just historical information. It could have happened days ago or microseconds ago, but, either way, that does not guarantee that anyone is still offering to buy or sell at that price.
Yes, exactly right.
There is an exchange of capital. You owned the stock and sold it, so you will get the money that someone else paid for it, minus the commissions of course.
What does a penny late mean? Suppose the bid/ask spread is one penny, and hence its 10.00/10.01. This means that if you want to buy, and submit a market order, you will pay 10.01. If you want to sell, you will get 10.00. The last price is just whatever the last transaction happened it, and it may have been on the bid or ask.
It sounds to me like you are using market order, and hence losing the spread. You perhaps see the last trade price is 10.01, and when you sell, you wonder why you only got 10.00. This has nothing to do with your broker, its how you're executing your trades.
Do you want a stock to get mailed to you
? Of course electronic trading is changes in the figures in trader accounts (intraday) and clearing net position after the end of a trading session. If we discuss CFDs then its pure betting on price change, as you are not credited any dividends in case you bought some stock CFD.