Expert: Wong Chin Woon - 10/7/2006

Question
is there any general rules of thumb when it comes to determining the number of shares of a stock purchased or sold in one order?

for example... let say i want to buy approximately $100,000 worth of XYZ stock. XYZ is currently trading at $4.12 per share. rounding the number of shares to be purchased down to the nearest block of 100 would give us a total of 24,200 shares to be purchased.

would there be a problem with submitting a single order for 24,200 shares?

what are some things that might be encountered with a single order of this amount?

if this is not be proper, what would be the proper procedure?.

thanks!

Answer
Hi Mark,

As long as you have enough margin, you can submit almost any size in a single order. However, if the market is thin, you may think of hiding the size and doing 1000 by 1000. Nevertheless you will still face situation where you could not get your order done if market run away from your intended price.

The exchange should have certain criterias where by your order should not exceed x% amount of market share. A force buy over the company will be exercised.

In Singapore, it will be 5%. I am not sure whether this one applied to USA.

Hope this helps. Cheers!

Wong