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Originally Posted by Huck Cheever
A question on the mechanics of stock markets:
Saying I'm putting in a market order to buy a stock, which has a bid/ask of say 10.00/10.05
And say there's like 5 dudes somewhere out there each with a limit sell order of 100 @ $10.05
If I am buying 100, how is it determined who's limit order gets filled?
Apologies if this isn't written very clearly
Afaik the person who's first in line gets to sell first.
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Originally Posted by Crepuscular
Hi Brons,
Thank you for the response. What about the company matters? Meaning, what information about the company would lend towards buying puts vs. shorting? It's a global tech company that employs >10,000 people.
Well, the price of options depends, among other things, on the volatility. So if the price of the stock jumps around all the time options will be more expensive. In that case it might be better to just short the stock.
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If he were to sell $25 calls, then if those calls are exercised, he should then exercise his options... is that right?
Thanks again,
C.
Options will be (99,9% of the time) only excercised at the end of the life of the option. In that case he should match the calls he sells with calls he has in his portfolio.
I think you can tell your friend to short the stock and sell matching calls. But the best advice you can give him is not to do anything at all as it's fairly dangerous to short a company as a speculation novice.