The 2 quick and easy ways to sell a share

Fsp Invest, 24 Oct. 2013

Tags: selling shares, easy way to sell a share, bid offer spread, how to sell shares, limit order, market order

When it comes to the time when you want to part with your shares, you will have to sell them through your stockbroker. It is a simple thing to do, but you need to decide how you are going to do it. Read on to discover two quick and easy ways to sell a share…

The two main methods of selling a share are by phone or by placing an order online, Gareth Stokes in Fear, Greed and the Stock Market explains...

If you phone your broker, you’ll tell him you want to sell 1 000 shares in ABC Shoes, for example. He will first check your account details to see that you own the quantity of shares you wish to sell.

You need to know the bid offer spread

He will then tell you that ABC Shoes is bid at 1,200c and offered at 1,220c. This is the bid offer spread.

Since you’ve done your analysis, and have decided to sell ABC Shoes, you also know what price you would like to receive for them. Usually, if you’re confident in your analysis, you won’t be worried about a few cents one way or the other when selling a share.

Given the above bid offer spread, you have the following choices:

1. You can place an order with your broker to sell at market
This means you’ll offer all the shares you wish to sell at whatever price they are currently bid. In other words, you don’t want to haggle – but rather dump all the shares in one go.

Given the above bid offer spread, you would definitely be able to sell some of the shares at 1,200c. But, in much the same way as when buying shares, you might not be able to sell all of the shares at this price.

Market orders can be dangerous because the bid offer spread is often very wide.

This scenario holds during market opening and closing periods – and is particularly noticeable in shares that trade low volumes. I

2. Your second choice is to place a limit order to sell the shares
This means you have decided you want a certain minimum price before you’ll consider letting the shares go.

You’re able to place a limit order for a period of 1 day up to a maximum of 30 days.

The only danger with placing a limit order is if your order is only partially filled. This may result in you being left with a small number of shares which will be uneconomical to sell because of brokerage and other costs.

So there you have it, two quick and easy ways to sell a share.

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