What's the deal?

[The_One_True_Fred]

Hello all.

To start off (as it will be readily apparent) i dont know much about stock trading. I recently tried to purchase (through Ameritrade) some GOOG when I realized the ask price was $9000. I've taken a bunch of Finance classes but somehow my professors have never mentioned this little detail of trading . Anyway, all I have is $3500 to throw into it, why's the ask so much higher than the share price? Or is there something major I'm missing? Thanks!

[Eric]

I think you missed an important detail. How many stocks were you willing to purchase?

[smorbic]

haha seriously! I'm not sure how it works over at Ameritrade, but if you get with a decent online broker you can make trades in any volume up to 1000 shares for like $8 a trade. so no need to buy whatever that ask price was for. however, if you are that unfamiliar with stocks, you should know about ask prices and bid prices.

just because a stock is "listed" at say 250.00, doesn't mean that you can magically aquire some at that rate -- someone has to be willing to sell, and shareholders can set any price they wish. So the "ask price" is the last price someone said they'd sell at. Of course, not only must you meet their ask price, but they must also have sufficient shares to meet your bid (although partial purchases are common) to get that price.

Similarly, the bid price is the last quoted offer to buy -- this is very important if say, someone bombs the UN building or something (heaven forbid). if the market falls out for a stock, you can't just magically liquidate that stock, either -- you have to meet a buyer's price.

Again, I haven't used Ameritrade, but I'm fairly certain that you just had the trading page configured incorrectly or something. Though many brokerages require a hefty minimum balance, many will waive this if you just pay more commission per purchase. G'luck!

[xboxundone]

the stock guru's are saying that google should reach 350!!! WOW wish i would have bought at 85!