When I sell my stocks, who am I selling them to?
Thanks,
Shawn
Answers:
Good question. No, you are not selling them back to IBM (unless IBM is doing what is called a stock buyback and then they would offer you a certain amount of cash for your shares). The stock market (New York Stock Exchange, NASDAQ etc.) basically just that...a place where buyers and sellers come together to exchange stock shares. When you sell your IBM shares because you think it will go down, there is someone out there that wants to buy your shares who thinks it will go up in value. That's pretty much it in a nutshell. No buyers you ask? Well, usually broker/dealers (think Morgan Stanley, Charles Schwab) keep a certain amount of shares in "storage" as well. So they might be the buyer of your stock as well. Cool?
To whomever is looking to buy it. IBM is doing a buy back but you probably will not have enough shares for them to purchase.
The stock market involved buyers and sellers. So when you sell, you sell to a buyer. There are millions of people buying and selling various stocks every day, so there is always someone who will buy it - but the question is at what price would they buy it.
So, when you sell a share of IBM it is to another investor who wants to buy that share. At times, the companies buy back shares of stock, but that is not nearly as common as a purchase by another investor.
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