Placing orders regarding Bulletin Board and Pink Sheet stocks?
I tried to make a market order to buy shares of a 50 cent stock and this is what came up:
Unable to enter order because orders for Bulletin Board and Pink Sheet stocks must be placed as limit orders
I am wondering what this means and how I would go about making a trade. From what I understand a limit order is a sell order that is set at a certain price after I have already made a purchase.
10 points to someone who can put the answer in a way that a beginner like me would understand.
You said: “From what I understand a limit order is a sell order that is set at a certain price after I have already made a purchase.” Nope. That is a stop loss order. Just in case a stock goes down after you buy it, so you don’t lose too much money, you put in a stop loss order, telling the broker “if the stock goes down XX number of dollars to YY price, stop out, or stop my losses, of the investment, in other words –sell. If the stock goes up you can put in a “trailing stop loss order” telling the broker if the stock drops XX percentage from its high point (during the time you hold it) sell.
If you put in a market order (which tells the broker to buy any the current asking bid is) for BB and pink sheet stocks, as most are so thinly traded, as soon as a “pump and dumper” sees your buy bid, they can put in a sell bid 10% or 50% or 2000% or higher than the previous bid, match the amount of shares you want to buy and you are a loser as the next person to buy will likely put in a limit order at the more reasonable lower price.
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