LogFAQs > #950459058

Here's something that might clue you in to what's going on here with Limit orders.

If you set a buy order at 70 cents, it will purchase all sell orders that are set at 70 cents or anything price below that (like 67 cents) up until it fills your share number. If there aren't enough shares available (or none at all), it will partially fill what it can and then sit there offering 70 cents to anybody who will sell at that price. This means *you* are the Bid price when people look at the stock. There might be somebody with a sell order of 75 cents as the current *Ask* and someone might see the current price and say "alright fine i'll get rid of it for 70 cents and place a market order or a sell limit order at 70 for you.

They might also see an average price of 73 cents and place a market sell order thinking it will be 73 cents... but it'll go to you for your 70 cent limit price. So that's another lesson to learn with market orders - you need to be acutely aware of what the bids and asks are.

It's the same thing on the flipside - if you decide to dump your shares at 75 cents it will find to anybody who has a limit order above that (like at 80 cents) down to 75 cents, and if it still has volume to fulfill it will set an offer of 75 cents to any buyers, making you the "Ask" price.

Limit orders are actually where the Bid and Ask prices come from.

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