Where does the money go if ask is lower than bid?
Where does the money go if ask is lower than bid?
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Daniël van den Berg · External communityPost link
External question — Personal Finance Stack Exchange
Author: Daniël van den Berg
Original post: https://money.stackexchange.com/questions/134135
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
If a stock has a current ask of €30,-, and I place a bid of €31,-, I assume my order would get matched with the ask order of €30,-. Where does the €1,- difference go? Do I buy the stock for €30,50, does the asker get lucky, the bidder get lucky, or does the €1,- "disappear" into the system (e.g. the broker)?
To answer some questions:
For the sake of the question I assume there are no fees involved.
Why would I offer more? I could see this happen in two scenarios:
A very volatile market, in which the price is going up rapidly, if I want to make sure I get the stock.
I place my bid slightly higher than the last bid, and at the same time someone places an ask to match the previous bid. (In this case it'll be a matter of cents instead of €1,-, but I'm assuming the mechanics are the same.)
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Daniël van den Berg Source score (net votes, not local likes): 5 Original post: https://money.stackexchange.com/questions/134135 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. If a stock has a current ask of €30,-, and I place a bid of €31,-, I assume my order would get matched with the ask order of €30,-. Where does the €1,- difference go? Do I buy the stock for €30,50, does the asker get lucky, the bidder get lucky, or does the €1,- "disappear" into the system (e.g. the broker)? To answer some questions: For the sake of the question I assume there are no fees involved. Why would I offer more? I could see this happen in two scenarios: A very volatile market, in which the price is going up rapidly, if I want to make sure I get the stock. I place my bid slightly higher than the last bid, and at the same time someone places an ask to match the previous bid. (In this case it'll be a matter of cents instead of €1,-, but I'm assuming the mechanics are the same.)
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