When the time comes when someone wants to sell their stocks do they have to wait for a buyer?

Question

How does this work with stocks?

And is it the same idea for options, that they have to wait until someone wants to buy them, or does it depend on what kind of stock?

Answer 1

Every stock or option needs a seller and a buyer.

So no problem if stock is widely traded. Specialists make the market work on these.

However, if the stock is lightly traded OTC, or without a specialist, it can be a long wait to get your price.

Answer 2

If you file a market order it gets sold immediately, of course the person buying it will pay more than what you sell it for (the spread) and that is what the person in the middle (buying from you selling to him) earns.

Answer 3

No the specialist buys the stock until a buyer is found.

Answer 4

The purpose of a stock exchange and/or the options exchanges is to provide a meeting place for both buyers and sellers of securities

The exchange mandates that there are specialist and/or market makers avialable at all times to make sure there are buyers and sellers, even if they have to buy or sell themselves.

The markets are auction markets, there are always buyers bidding to buy a security at a given price and at the same time there are sellers offering the security for sale at a price.

This response is true for both options as welll as equities,

Answer 5

If you put in a limit order inside the bid-ask spread, then yes you'd have to wait til some sucker puts in a market order.

But if you put in a market order, the MM would usually fill your order right away but will probably at the worst end of the spread.

Hope that helped!

Answer 6

Depends on the stock. If it is a large stock there will be loads of liquidity so you will not have to wait.