Ok i am very new to stock buying and just opened an account online and want to buy Ford stock with a few thousand and hold on to it for a while.
Im all set up to buy but wasnt sure how it works when it is the weekend and the market it closed.
It says it is at 10.84 right now, but when it reopens can it start at a different price depending on factors over the weekend?
Also on the account right now, it had the price at 10.84 but i think its trying to tell me to buy that is would be 10.89? Is this normal or should it be 10.84 and when it opens Monday morning it will be 10.84.
thanks for the help!
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5 Comments
Yes, Monday morning’s price can be different than the last price of 10.84.
The 10.84 price refers to the last price Ford traded at. In this case the price refers to Ford’s last trade at 4 PM on Friday. Unless some kind of significant news comes out between now and 9:30 AM on Monday, Ford should reopen for trading roughly near 10.84.
The 10.89 figure could represent either the last trade in after hours trading (something you’ll want to stay away from as a new investor) or the “ask” price. When the market is closed the ask price can sometimes be wierd, so do not place too much faith in its predictive power. When the market is open the ask price represents what you should expect to pay for the stock. Your price can vary slightly from the ask if your order is not for the same amount of shares or another order grabs the shares before you do.
Buy Ford with a “buy stop”… so you don’t get hurt as it goes down.
What’s a “buy stop”? Good question…. lots of traders don’t know what it is…. but it can be very helpful.
On the other hand… your question about the opening price shows that you have no concept on how the stock market works… wouldn’t it be better to know what you’re doing before you invest. At this point you don’t know what you should know (to even ask a question). Learn the basics of investing before you invest. The cost of making a mistake can be very high!
I wouldnt buy Ford stock. Try another stock with a better industry and dividend paying
You have to be careful about looking at bid/ask while the markets are closed, because that might get skewed depending upon whether the data you are looking at was at the market close, or from after hours trading (low volume trading after regular markets closed).
Even pre-market trading on Monday morning might or might not reflect the price the regular market will open at. If you are going to enter an order while the markets are closed, it would be best to use a limit buy order at a price you are willing to pay. It might not fill if it stays over your limit. A market order entered while the markets are closed would fill on the open, but might end up at a higher price than you expect.
For example if you look back at more detailed data from the past 5 days, you can see how it sometimes jumps up at the open and then settles down.http://finance.yahoo.com/echarts?s=F#cha…
Tom, I would be careful about jumping in the market right now in general.
A lot of people make rookie mistakes because they walk into the market blindly, not knowing what is going on, what can or is impacting the market and the stock(s) they might buy.
Basically what you are prob looking at is the last trade on Friday: $10.84 and this assumes the data feed you are getting from your broker is correct. This looks like the last correct trade.
The trading range on Friday was 10.70 x 11.61.
10.70 was the lowest price someone SOLD the stock, and 11.61 was the highest price someone BOUGHT the stock. The “Spred” shown above, is ALWAYS low number Bid (sell), high number ASK (buy).
There are an infinite number of factors that can move a stock price. It can have nothing to do with a specific stock and have more to do with economic news, political news, global news, trends/ charts, money flow going in or out, trading volume, etc., or it can be company specific such as earnings, or industry specific, such as what is happening to the other auto companies and how is that or could that impact this auto company?
When the market opens, the stock 99% of the time moves with an opening price based on buy/ sell volume. Generally, but not guaranteed, if the buy volume is higher than the sell volume, the stock goes up; if the sell volume is greater than the buy volume, the stock goes down.
example:
In 1997, Asian markets tanked overnight.http://en.wikipedia.org/wiki/1997_Asian_…
Traders and market makers anticipated that U.S. sell orders would come in like a 1987 crash. What happened is that market makers dropped the bid price super low on stocks (many times $7-15+ a share on Blue Chips) and across the board. I was buying for my clients, because I saw that this was a temporary situation, not a long term U.S. problem.
The drop in stock prices was temporary as people did not sell, they bought. Thus, prices recovered a huge part of their losses from the opening minutes of trading.
Note this is an extreme situation, but happens, and has happened numerous times over the last 3 years on both sides, and at various degrees.
The point is if you don’t know a freight train is coming, better stay off the tracks.
In the case of Ford (F), I could not tell you where it will open. The best indication is to watch the S&P Cash Futures to see how the overall market is going to go.
I like F long term, but I was a seller awhile back, and am waiting maybe mid year or so to see how the market moves on what has been shaping up to be a possible and way overdue correction, impact on interest rates, and political policies that can impact the market.
If you HAVE to buy, that’s your call. I would consider dollar cost averaging into the position
Dollar cost averaginghttp://en.wikipedia.org/wiki/Dollar_cost…
Good Luck!