question on stocks (ameritrade)

forr3st · #1 (**permalink**) 07-17-09, 07:17 PM

hello everyone, this is my first post. My name is John Smith and I am an Ameritrade member. My situation is: I have $1000 to mess around with and I want to make an investment on a stock. I have been watching a certain stock that has always made predictable moves up and down. This stock always goes down to $0.13 a share and then goes up to $0.25 a share. This seems to always happen. What I want to do, and actually tried to do, is buy $1000 worth of shares of this stock at $0.13 a share. This would get me 7692 shares minus the $9.99 Ameritrade charges per transaction. Then, when it goes back up to $0.25 a share I want to sell it and make $932. My question is: The market or Ameritrade (I'm not sure which) will not let me buy or sell whole amounts of the amount desired. Instead, it buys and sells small chunks at a time, and I mean small. I was watching the buying, and I noticed that it was buying like anywhere from 5 to 30 shares at a time. And each time a transaction would occur, I would owe the commission of the $9.99. If this pattern kept up, I would owe thousands instead of my goal to make $932. My question is: Why can't I buy or sell the amount of shares desired at the time I want to? I want there to be only two transactions- one to buy and one to sell when the limit price is met. I dont want to get charged for small amounts and end up losing big time. I am eager to get my feet wet in the market. thanks

Jeter09 · #2 (**permalink**) 07-31-09, 03:53 PM

The stock market is a lot more complicated than your perception of them leads you to believe. I would be careful with your money and learn a bit more from professionals (if possible) before going through with this type of transaction.

forr3st · #3 (**permalink**) 07-31-09, 07:33 PM

Could you possibly explain my misunderstanding in my situation? I just don't understand exactly why the market will not let me buy and sell my desired amount of shares when I want to. I will be more careful with my money, but I really want to know how it all works, because I see potential.

Strategist · #4 (**permalink**) 08-02-09, 10:32 PM

Quote:

Originally Posted by forr3st

Could you possibly explain my misunderstanding in my situation? I just don't understand exactly why the market will not let me buy and sell my desired amount of shares when I want to. I will be more careful with my money, but I really want to know how it all works, because I see potential.

Forr3st:

I am fairly new to the game myself, and by no way consider myself to be an expert. However, I have studied the market and since you obviously are not getting much help, I will tell you what I think.

Unless buying stock directly from the company, stock shares are bought and sold to or from other individual investors just you like you and I, (through a stock broker such as TDAmeritrade). In order to sell the shares, there has to be another investor out there willing to buy them. And, in your case, in order to buy shares, there has to be another investor out there willing to sell you those shares.

Apparently, there is not anybody out there holding $1,000 worth of shares that is willing to sell them all to you. Your broker (TDAmeritrade) knows you want those shares, and is doing their job to try to buy them for you as they become available.

If you are not willing to pay the set commission of $9.99 for however many transactions it takes to get you that amount of shares, then you should designate that in your order. TDAmeritrade gives you the option "All or None", when placing an order. Choosing all or none (AON) indicates that you want your order to be executed in its entirety or not at all. " I'm guessing that you would probably want to select the "All or None" option, which will get you all of those shares in one transaction, or none of them.

Hope this helps.

forr3st · #5 (**permalink**) 08-03-09, 01:23 PM

thanks strategist, i think you understand what I am confused about exactly. You explained it and cleared that up for me. I've been searching for someone that would understand what I was talking about, and you've answered the question. The all or nothing option is probably what I need to think about, but, it might take forever to get all the shares i want, or just a very long time. I need to figure out how to buy directly somehow, but anyway thanks for the reply, very appreciated

hogheaven · #6 (**permalink**) 08-14-09, 06:31 PM

Strategist is correct. Also if your penny stock has very low daily volume, for ex: 50K shares/day, your chances of getting filled are slimmer than a stock that trades several million. Additionally, if your penny stock intra-dasy low is always .13 and you are trying to buy at .13, you probably won't get filled. This is due to the fact that the "ask" price will most likely be a penny higher , or in this case, your bid would have to be .14 to get filled. Hope this helps.