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snow

02/03/07 1:48 PM

#3414 RE: Myth #3412

myth

When the bid is hit it is normally shareholders who sell their shares at the bid. As a point of departure those who buy shares buy at the asked price and those who sell sell at the bid. But there are exceptions. Sometimes a price between the bid and the asked is hit. If the market-makers expect the price to fall they may sell shares at the bid because they expect to be able to cover at a lower price.