At what price should I trade?

A few things to consider before buying or selling investments

There are a number of factors to take into account when determining what is the right price to trade at. These include, but are not limited to:

  • The current market price
  • What price you bought the investment at (if selling)
  • Your personal situation
  • News about the company

Market price

To begin with, you can always start by looking at the current market price. Choose the syndicate in question, and look at what the highest price for requests to buy is, as well as the lowest price put for sale.

On any market, the area between these two prices is known as “the spread”. If you want to sell immediately, you need to match an existing order, by “crossing the spread”.  If you are selling your investment, that means setting your price at the same price as the highest buy order. If you are buying, this means setting your price as the lowest sell order.

Initial purchase price

Most people will also take into account what price they have bought their investment at. Usually, investors are unwilling to sell their investments at a lower price than they purchased it at.

Personal situation

Another key factor is the personal situation of the investor. If for one reason or another the investor needs the capital for something else, she might be willing to sell at a loss. Perhaps to invest into something else, or simply for personal reasons.

Company news

Another crucial factor that plays in, is news about the company. If the company announces that they have landed a big customer, or lost a key player on the team, this can dramatically affect the price positively and negatively respectively.

These are just some of the many factors that play in when trading on any market for trading for-profit companies, including trading on Funderbeam.

Warning: Investing in early-stage and growth companies puts your capital at risk. Please read our Risk Disclosure Statement