If I sell my stock at "market price" am I getting the highest 'bid' price?

Question

when I look at my time & Sales tracker in scottrade I can see the actual trades taking place, and whether they took place on the ask or the bid. I'm trying to understand when you buy / sell @ market price, how the price you get/pay is arrived at.

Is it simply that when you sell @ market you get the highest bid, and when you buy @ market you get the lowest ask?

Answer 1

It can depend on the stock too.

I read that a broker can go to different market makers or traders and they may NOT give you the best price but the brokerage gets a little kick back from them. Yes, this is legal.

Using a limit order will prevent that.  

Answer 2

Essentially, yes, in an ideal world.

You also need to be aware of the non-ideal.

Try using a market order in after hours trading, or an illiquid market, or a fast market, and you'll get your head handed to you.

Answer 3

You'll get the best current market price which can change every second.

BID price: You own the stock and you want to sell.

ASK price: You want to buy a stock.

You may want to use a limit order if the difference between the bid and ask ("the spread") is say 20 cents or more difference.

Take the # of shares you own x the spread, and that is how much money is still on the table (to negotiate with the market makers).

Never use market orders in pre-market or after market trading. You could get less or pay too much.

Use caution with market orders in fast moving markets. You could get less or pay too much.