Does a person make a profit when the bid price is higher than what was originally paid for the share? I know that you buy the ask, sell the bid, but if I ask to sell a share at a higher number than what I paid for it, especially if the share is appreciating in value, do I stand a higher chance at making a profit?
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Didn't you ask a really similar question yesterday? money.stackexchange.com/questions/134294/…– RonJohnDec 29, 2020 at 7:48
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3"if I ask to sell a share at a higher number than what I paid for it, especially if the share is appreciating in value, do I stand a higher chance at making a profit?" If you buy an apple for 90 cents, and sell it for 100 cents, then you've made a profit of 10 cents. What's your confusion?– RonJohnDec 29, 2020 at 7:50
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3OP, your confusion may be: you can put in an ASK at ANYTHING YOU WANT. Say a stock is trading around $100. You can put in an ask at $200 if you like! No problem! More realistically, you could put in an ask at say $110. Then, just as you say, if more and more people are desperate to buy the stock, it may well fill at $110 !! So YES that's just what you do!– FattieDec 29, 2020 at 14:37
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I actually do that (what @Fattie proposed), in the after-hours market, and from time to time make some small change with it. So yes, of course you can do that.– AganjuDec 30, 2020 at 8:15
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1 Answer
Does a person make a profit when the bid price is higher than what was originally paid for the share?
Only if the person sells for that bid price, meaning they place an order and get it executed at that price.
I ask to sell a share at a higher number than what I paid for it, especially if the share is appreciating in value, do I stand a higher chance at making a profit?
A higher chance than what? Asking to sell for the same price you paid? Yes, because you have zero change of making a profit if you sell for what you paid for it. Note that the higher price you ask, the smaller chance you have of getting it filled, so it's a balance between probability of profit and amount of profit.
Note that this probability cannot necessarily be calculated, but just conceptually orders sell orders with lower prices get executed first, so the odds that yours gets filled will be lower the higher you put the limit.
answered Dec 29, 2020 at 13:48
