Thursday, January 17, 2013

Buy at the ASK, Sell at the BID


The ASK is the price that the stock is being offered for.  The BID is the price one is willing to buy the stock for.

Imagine you’re buying mangoes in the market.  The vendor is selling them for Php60/kg. (ASK).  You bargain with her to give it to you for just Php50/kg. (BID). 


Same thing with buying or selling stocks.  As I have mentioned in my previous post ‘How to Buy Stocks’, the rule is: ‘Buy at the ASK, Sell at the BID’.  If you are buying, you look at the ASK.  If you’re selling, you look at the BID.

And for easier recall, use the acronym B.A.S.B. which you may give whatever meaning to, whichever works for you.  Here are some suggestions:

1.  Buy And Sell Business
2.  Brother And Sister Bonding
3.  Be A Successful Businessman
4. Bakit Ang daming Sumusulpot na Bading? (di naman nanganganak! /wahaha   Haha J.  ♥ Love you friends!)
Personally, I prefer ‘Basta Ako Beautiful & Sexy!’ /hmm


Today, I will explain what the columns for Bid and Ask mean.  As usual, we’ll do this by looking at the image first before reading the description that follows.

Buy at the ASK




First make sure that the market is open (M-F, 9:30-11:30am, 1:30-3:30pm).  In this case, it’s only a few minutes before it opens so it says ‘Pre-Open’ under Market.

We’re buying Ayala Land Inc. as an example.  Once you type the Stock Code on the 1st box (in this case, ALI), all the info about it will appear on the right side.

On the ASK board, you’d find the top 5 lowest ASK prices: 27.20, 27.30, 27.40, 27.50 and 27.60.  Beside them, you will find the total number of shares being offered, as well as the number of people offering them.

The 1st row shows:  27.20 – 5,500 – 4

So, for ALI, the lowest ASK price that you can buy it for is 27.20.  There are a total of 5,500 shares being offered at this price.  And there are 4 traders offering them.

Same thing for the 2nd row: 27.30 – 900 – 2

The 2nd lowest ASK price for ALI is 27.30.  There are 900 shares being offered at this price.  There are 2 traders offering them.

And so on and so forth.

Thus, if you want an immediate execution of your order, refer right away at the price in the 1st row of the ASK box.

What happens if you had mistakenly put in a higher price?  

As I’ve shown you in my post ‘How to Buy Stocks’, your order would still be executed at the lowest price being offered.

How about if you put in a lower price than the lowest ASK price?  

In that case, your order will not be immediately executed. It will then be considered a Day Order. You will be bidding against other buyers and you will have to wait within the day for a trader to accept your Bid price before your order gets executed.  If no trader offers the stock at your Bid price within the day, your Order will be automatically cancelled.






We, Truly Rich Club members, are lucky because we use the very same strategy that Warren Buffet uses:  SAM.

So, when we get a ‘Stock Alert’ from Bro. Bo suggesting we sell a particular stock, I get super excited coz then I’d see how much profit I've made from my shares. With Jollibee, I made over 1k when I sold them (I only had 40 shares.  Imagine if I had more?)


Sell at the BID




Since, we are selling, we will be looking at the prices (BID) that people are willing to pay for our stocks. We’re still using ALI as our example.

The 1st row shows:  12 – 2,100 – 27.20

This means that there are 12 people wanting to buy 2,100 (in total) shares of ALI at 27.20.  

Same goes for the 2nd row:  6 – 700 – 27.15

6 people wanting to buy a total of 700 ALI shares for 27.15.

And so on and so forth.

That's it for now.  I hope y'all learned something from this post.  If yes, then please feel free to tweet, like and share!

Thanks & God bless,

Next Post:
Previous Post:  How to Cancel an Order

20 comments:

  1. your blog is truly educational.. im a new member of TRC and soon be a an investor thru COL.. thanks for the information..

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    1. Thank you, Jong Red. Appreciate the feedback. If you have questions, pls feel free to comment here or contact me via FB or email.

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    2. Thank you this is very interesting for me i want to learn more...im new member of TRC and soon be an investor thru COL can you e mail me how to contact? or just give me the contact number, coz i have something to ask first about my concern....once again thank you so much....im waiting your reply....more power to the club...God Bless you all.

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    3. Thank you this is very interesting for me i want to learn more...im new member of TRC and soon be an investor thru COL can you e mail me how to contact? or just give me the contact number, coz i have something to ask first about my concern....once again thank you so much....im waiting your reply....more power to the club...God Bless you all.

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    4. HI Aileen. Thx. I couldn't find you on our TRC system. When did you sign up? You may email me at supportgold@boclubs.com or you can log in to our own TRC social site and ask me directly. Just click on 'Ask Joey' button there.

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  2. This comment has been removed by the author.

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    1. Hi Joey Mj,
      Thank you for creating this blog. I am a new TRC and COL member. Being new in this venture, I just gave my trust in the Lord for this. He will be my guide and wisdom. And thank God for leading me to ways and means to help me go through with this.
      My question with the SAM is that: when TRC advises to SELL, does it mean sell 100% of the stock you have and forget about that company and just wait for the next advise when to buy again.What I do now is just buying for long term investment, but I have been wondering if I am doing it right.I could be missing the point.
      Please enlighten me to learn more about investing.
      Thanks for your help and God bless.
      rrg

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    2. Hi RRG,

      Yes, when we have a sell alert, we sell ALL our shares. We're then asked to either use all the cash to buy a certain stock or divide it among several stocks, or hold on to it until our mentors tell us to buy again.

      However, not all members do that, and you may opt not to do it, too. See, if your shares are only minimal that the profit is not that significant (like maybe 1k or less), then just hold on to your stocks. We're in this for the long haul anyways.

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    3. Hi Joey,

      Thank you for sharing your knowledge in Stock Market. I'm just a new TRC member and just opened an account to COL EIP. My question is somehow related to RRG.

      When I activated my EIP account, I went to EIP Scheduler, and listed the SAM companies. Theres a portion on which I have to log down the fund that I have to deposit each month and its duration.In that case I chose 3 years. Lets say I will sell my share (lets use Jollibee as an example)just after a month, do I still have to fund it or shall I cancel it? please note that I have 3 years duration. In addition with that, in EIP Scheduler, if I have funded Jollibee lets say with 3000Ph and the current price is 121.00 with minimum share of 100. It means that I still have some remaining amount from JFC fund, will I able to use that on buying other stocks from other companies?

      Thank you so much for your advise. God bless...

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    4. Hi Gwen,

      I apologize for the delay in my reply. I honestly thought I had answered this question, but when I checked back, I didn't find it here.

      Anyways, to answer: The EIP scheduler is there for you as a guide, if you don't have much time to view your account as often. It reminds you to fund and buy. However, since you are a member of TRC, you don't need that kind of reminder. Why? Because we get bi-monthly Stocks Updates from Bro. Bo himself, plus the Stocks Alerts that he sends as often as he deems necessary. Meaning, we get reminded each month to fund, buy, hold, or sell. The EIP scheduler would then work most for people who are not members of the Truly Rich Club, since they'd be needing that kind of guidance to grow their investments.

      But if in any case you still wanna follow the EIP scheduler, bear in mind that you are the only one that schedules the same. Not COL. So, you're actually the one deciding which stocks to purchase every month, how often and for how long.

      That answers your question regarding selling. Once sold, do you still buy the same stock? Again, it's up to you if you still want to. But yes, you may.

      Whatever the funds remain, you may use in buying other stocks. The money is all yours. COL won't get it from you. They do have charges everytime you have a buy/sell transaction and the rate depends on the volume.

      My advise would be: cancel the EIP schedule and just follow our method which is SAM. Trust me, you'd maximize your profits this way.

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  3. Hi Joey!

    I'm still confused between SAM and EIP. In one of your photos, I saw the instructions: "If you're following the SAM for BPI, then Sell. If you're folowing EIP as a strategy for BPI, continue buying"; so my question is why can't those following the EIP strat sell their shares? I still need to know the difference between EIP and SAM. Also, can't those who have starter investments be an active trader? Hope you can help me with this. Many thanks!-Alvan

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  4. EIP follows Peso Cost-Averaging Method where you buy stocks consistently, regularly at an interval of weekly, monthly or quarterly for a long period of time (usually 5-10 years) whether the price is low or high.

    TrulyRichClub follows Strategic Averaging Method (SAM) where you purchase stocks when they're still under the 'Buy Below' price, and then sell them when they hit their 'Target Price'. The holding period could be a few months or years depending on when we reach the target price.

    Anyone can be an active trader, whether you open a starter or a plus account. Pls read my post on the different 'Types of COL Financial Accounts'.

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  5. Hi Joey!
    I'm a new TRC member and have never invested in the stock market before. Joining the club and following Bro. Bo's advice is quite a huge leap of faith for me. Thank you so much for contacting me and leading me to this blog. I'm reading the articles here and learning a lot. I'mlooking forward to opening an account with COL already.

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  6. Hi Joey,

    I'm a new TRC member and for newbies like me I find blog your very educational. Thank you for contacting me and leading me hear.

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  7. hi joey,
    im also a newbie and i really want to ask this because im really confused...if bo says continue buying on a certain company,does that mean that every month i should buy that company and with the same board lot?i was confused because after 3 months of buying the same company that offered a 100 board lot,instead of getting the same 100 board lot,it became 300?is that normal?can you please explain?im really not good at this but i really want to learn because i want to be financially free..please and thank you

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    1. Continue buying the stocks as long as they are within the Buy Below Price. The board lot is the minimum # you can buy, but you can buy more if you want. If the board lot is 100, you can buy in multiples of 100 (so 200, 300,400, 500, etc). If the board lot is 10, you can buy in multiples of 10 (so 20, 30, 40, 50, etc). No odd lots.

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  9. hi ms joey,

    good evening.

    favor, what partially executed mean? i bought stock this afternoon and the remarks was such.

    i sold stocks last week and was executed. but where will the money from the stock i sold be reflected. its no longer in my portfolio.

    thanks
    best regards,

    danny

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  10. Hi Ms. joey,
    what is the difference between investment guide of COL and TRC SAM tables? they both have a perception of buy bellow price, are they both the same.

    thanks

    fred

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