Is it possible to be unable to sell a stock back to a firm?

Question

If I owned 100 shares of ABC for $X/share through an online broker (ie. ING Direct), I should be able to sell all 100 shares at any given moment, no? Can I be stuck with a particular investment for longer than I desire? Could I possibly be forced to hold until a buyer is located?

Answer 1

If the stock is publically traded, you have to sell in the market place through a registered broker/dealer

If the stock is publically traded and listed on an exchange, you can always sell it, since there is always a market

You may no like the price, but there is a market

If the stock is not publically traded you can sell it back to the company, but there is no price assurance.

Answer 2

You can't sell your shares back to "a firm" but you can sell them on the open market to another buyer like yourself.

You can always sell if the price is right. If there are literally no buyers available, the "market maker" or "specialist" will pick up the shares at a discount price. Even OTC stocks have market makers who facilitate trading.

For penny stocks and stocks with a small float, it's more likely that you might have to wait to get the price you want.

Answer 3

With the amount of junk stock collectors now a day, it is very hard for you not to be able to sell ANY stock that you bought on-line! :O)

Answer 4

It is possible to get stuck.

so you want to be sure that the stock you have has a rather large "volume" base. Also, you can check the 'bid' 'ask' prices. if they are close compared to the price, then they can usually be traded easily. If they are far apart, you will receive less for the stocks

If the company is in real trouble, no on may want to buy your stocks, and you can lose everything..

for these reasons, you want to build a portfolio with a broad based asset allocation that is well deverisfied. It is usually easier to do this with mutual funds and etf's rather then individual stocks.

I suggest you do the following before investing too much.

here are some steps to  prepare you.

Step 1.

First decide what kind of brokerage you want to work with. You can open a brokerage account in your bank, with a large full service brokerage or an internet brokerage. I find when I get help, most people want to sell me things that are better for them….

So I use http://www.scottrade.com because it’s cheap and easy with low frills. I like their streaming quotes and I do my own research and make my own investments. But any low cost internet brokerage service is fine.

Step 2. get a subscription to Financial Times, Barrons or Investors Business Daily… Do this for 6 months or a year. At first, It seems a bit mysterious, but pretty soon you start to understand the terms and things that investors are looking for and what they are afraid of.

Step 3. If you have some money to invest, put it in 3 month CD’s right now. First the market is unstable and second you have some homework in Step 3 to do before you do any investing.

Step 4. Go out to the internet and search on the following subjects. Become very familiar with the concepts.

Asset allocation

Long term investing

inflation  

Roth ira vs ira

Large med small cap

Value vs growth

Indexed mutual funds

No load mutual funds

ETF

Sector funds

Bonds CD preferred stock

dividends

International funds

Market cycles

volatility

Fundamental analysis

Technical analysis

In most cases, I think it is wise to use indexed mutual funds and ETF to build the base of your portfolio.

Step 5 go to http://clearstation.etrade.com/ and sign up for a free account. Play around there by looking at graphs and fundamentals. If you click on the graph names, you will get clear information about what the graph means and how to interpret it. I think it’s also a good idea to pretend you have $10,000 and start buying and selling on paper. Keep track of where you are each day for a month… It’s a lot easier to lose play money then real money….

WARNING: don’t rely on technical analysis alone. These graphs are good at telling you WHEN to buy and sell, but not WHAT to buy.

Don’t get involved with futures, currency, options (unless you get stock options at work), commodities, annuities or other derivative type investments at this time.

It would be wiser to build a portfolio with broad based asset allocation through diversified mutual funds and etf's (After you have spent a lot of time in step4, you will understand what this means and why it is wiser)

Good Luck