O K I am ignorant in the stock market?

Question

When someone sells shares of a stock, who buys them?

For example, Freddie Mac today. 200 million shares traded.

Are there really that many buyers or do they get dumped in a pool?

What if I want to sell, and no-one wants them?

Answer 1

no, there are not 200 million buyers.  Usually transactions take place for more than 1 share at a time.  In fact, transactions generally are traded in a round lot i.e. 100share at a time minimum.  Now, it's not surprising for someone who owns many many shares, to the tune of 10s of thousands, as an individual.  Now, institutions would have more.  ie. Mutual funds who pool everyone's money can buy more shares.

Now, there will always be buyer.  To be listed as a stock, there are market makers.  These are brokerages who are responsible to make sure that there is a market to absorb any disturbances, so stock will not be TOO volatile (now, that doesn't mean it won't be too volatile for your individual taste).  These  brokerages will buy your share, if no-one wants them.  They will determine a fair market price, that's not too volatile.  Once again, if really no one want them, there is a good chance that it'd be too volatile for your individual taste.  Or, you can name a floor price (ie limit price), and wait for a buyer who's willing to pay that price.

These market makers also holds inventory (or short inventory) in order to facilitate market transaction.  When you sell your stock, they buy them into their inventory.  When you want to buy stocks, you buy it from them.  They sell it from their inventory.  Generally speaking, you will always go through them.  You don't directly sell it to another person.

Answer 2

Hi,

Check this one out:

http://where-to-invest.blogspot.com/sear...

Answer 3

There is always buyers, sometimes it is just brokers.

Answer 4

- Anyone can buy them now that we have internet brokers and individuals can easily trade themselves in real-time.

- 200 million shares were traded, but consider most people aren't going to trade less than $5,000-$10,000 per trade. Then realize the big companies trading hundreds of thousands of shares at once.

-There must always be a buyer for every seller. If you want to sell and no one wants to buy at that price, then that means the price of the stock is going to go down because there is no demand. Eventually it will get cheap enough where someone is willing to buy, or if you put a limit order in, you may never sell if it doesn't meet your criteria.