What if no one wants to sell the stock I want to buy?

You may purchase or sell stock any time the stock exchange is open. What happens if no one wants to sell the stock you want to buy? The short answer is, `that depends', but eventually some one will want to sell, but maybe not at the price you want to buy.

When you see the `ticker' or the latest stock price, this is actually the price of the last recorded trade for that stock. A willing buyer and a willing seller have found a price that they both agree upon and they have exchange their stock and money. This transaction becomes the benchmark or `the market price' for the next trade.

For example Bob Buyer in Boston and Sam Seller in Seattle call up their broker or go online and place a trade. Bob says he wants to buy 100 shares of XYZ. At roughly the same time Sam places an order to sell 100 of his shares of XYZ.

Most orders (buy and sell) are placed "at the market" - which means "I want to buy or sell now, just get me the best price you can." All these orders are routed through a series of brokers, dealers, and computers and, in the case of the New York Stock Exchange, end up at a physical trading post, where thousands of other orders are flooding in at the same time. As they come in, these buy and sell orders are matched up, by computers and/or human beings, based on the price of the last trade recorded for that stock (the "market price.")

An order to buy 1,000 shares may be filled by 10 orders to sell 100 shares each. Depending on the market and how fast it is moving, the sellers may get different prices for their shares. The matching process is done by keeping a running list of orders to sell and orders to buy. When the requests match up the transaction is completed.

But if trading gets too lopsided - everyone wants to sell and no one wants to buy - the exchange may stop trading for what's called an "order imbalance," which is usually caused by a piece of very good or bad news about the stock - or even a rumor being passed around by traders. After everyone's had a chance to digest the news, trading starts up again at a different price and (usually) things go smoothly again.

This new information could cause a situation where you are unable to find a seller for your order of stock. However, the order imbalance is usually only temporary and then you are able to complete your order as desired. You may find that the news has changed the stock price though and nobody is willing to sell to you at the price you originally wanted. You may have to raise the price you are willing to pay.

The opposite is true also. The news may have been bad and now you are able to get the stock at a better price. However, if the stock is really bad, you may want to evaluate whether you want to purchase the price.

After everyone has had a chance to evaluate the information, trading should resume. If there are more sellers than buyers, then the price is too high. The price should move down until a price is found that has similar buyers and sellers. If there are more buyers than sellers, the price will move up in a similar fashion. Eventually, a price will be found that has equivalent buyers and sellers and trading will resume normally.

If there is a spread - the seller wants more than the buyer is willing to pay - then the trade won't take place in theory. However, on the New York Stock Exchange, the people matching trades are supposed to dip into their own pocket, if necessary, to match trades. This will help keep the volume moving in a slow market.

In summary, if you want to purchase stock you should be able to eventually find a seller. You may have to pay more than you want to get the stock, but the market price means that somebody just sold it for that price so you should be able to find somebody else who is also willing to sell for a similar amount.