Bid / Depth Limits When Buying

[minimoke]

I tried buying some stock today at a low price (what I reckoned the company was worth) but my bid was rejected because it was too far from the market. So, how close to market does a bid have to be to get accepted?

[h2so4]

I tried buying some stock today at a low price (what I reckoned the company was worth) but my bid was rejected because it was too far from the market. So, how close to market does a bid have to be to get accepted?

Try buying on a down day (maybe today), any bid will be accepted?

[Ponda]

I tried buying some stock today at a low price (what I reckoned the company was worth) but my bid was rejected because it was too far from the market. So, how close to market does a bid have to be to get accepted?

MM, I have had that happen once before, but I was selling.
It was when MAK were buying out BON and I just wanted to get rid of my BON shares.
There was quite a range between buy price, the sell price and previous sale.
i.e (I cant remember the exact numbers but you will get my drift)

Buy 60 cents, Sell 99 cents, Last Sale $1.00

I tried to bail out at 60 cents but was told that it was too far out of the market.

But in answer to your question: I don't know how close you have to be.

[Voltaire]

I tried buying some stock today at a low price (what I reckoned the company was worth) but my bid was rejected because it was too far from the market. So, how close to market does a bid have to be to get accepted?

I've had this happen several times. I suspect, but don't know, that this is a brokers call based more on rules of thumb than clear guidelines. I say this because there's been an apparent lack of consistency to the rejections - low buy bids have been rejected even when sell orders at much greater distance (in both actual and percentage terms) from the current price have been showing on the depth lists.

[Jay]

I've not been able to figure out depth yet.

How do you work out the sale price if say the 1st sell rpice is 1.00 and then higher and the buy price is 89c and lower

You maybe right volt

[777]

I've not been able to figure out depth yet.

How do you work out the sale price if say the 1st sell rpice is 1.00 and then higher and the buy price is 89c and lower

You maybe right volt

Well there won't be a sale with those quotes. The buyer is not offering enough and the seller won't sell below 1.00. Therefore no action.

[Jay]

Thanks 777, just an an example and yes a bit to far away from each other, i agree.
However, I have not watched depth "live" but tried to work out what the next price will be and got it wrong every time - so far

[777]

Keep at it you will work it out. Think what the quotes will be once the opening bids are settled and it will become obvious.

I am assuming you are meaning the quotes prior to market opening or the closing ones at 1645 to 1700 hrs.

[Jay]

Yes you are right 777

Will keep at it

[shasta]

I tried buying some stock today at a low price (what I reckoned the company was worth) but my bid was rejected because it was too far from the market. So, how close to market does a bid have to be to get accepted?

From what i understand bids +/- 25% of the market price won't get executed, not sure how it works with penny dreadfuls though, ie those under 1c that trade +/- 100%