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how does it all work?

  • 22-07-2008 5:48pm
    #1
    pjproby
    Registered Users, Registered Users 2 Posts: 843 ✭✭✭


    i have a share account with NIB. You can buy or sell a share online and the proceeds are debited or credited to your account sometimes in minutes.
    I am baffled-who for example is buying the shares from me- are NIB holding them in some account and selling them later or does a seller actually buy them.


Comments

  • #2
    pocketdooz
    Registered Users, Registered Users 2 Posts: 1,559 ✭✭✭pocketdooz


    pjproby wrote: »
    i have a share account with NIB. You can buy or sell a share online and the proceeds are debited or credited to your account sometimes in minutes.
    I am baffled-who for example is buying the shares from me- are NIB holding them in some account and selling them later or does a seller actually buy them.

    Buyers and Sellers of shares meet through brokers and exchange shares at the current market price.

    Hence a Stock "Exchange"

    This is a simplied version but is basically what happens.

    The Exchange matches buyers with sellers.

    NIB (in this case) act as your broker


  • #3
    pjproby
    Registered Users, Registered Users 2 Posts: 843 ✭✭✭pjproby


    thanks for the reply-its the instantaneous nature of the transaction that baffles me. it is almost as if NIB give a guarantee that they will sell the share.


  • #4
    pocketdooz
    Registered Users, Registered Users 2 Posts: 1,559 ✭✭✭pocketdooz


    pjproby wrote: »
    thanks for the reply-its the instantaneous nature of the transaction that baffles me. it is almost as if NIB give a guarantee that they will sell the share.

    Sometimes people underestimate the size of the market.

    For example, there are generally around 3 million AIB shares traded a day on the Irish Stock Exchange.

    If you break this down it turns out to be around 100 shares per second.

    Therefore there are constantly buyers and sellers dealing in the marketplace. So, if you want to sell - there will be a buyer and vice versa.

    If they cannot find a buyer at the current market price, someone will bid lower and therefore the share price falls or if there is too much demand for that particular sale, the buyer will bid more to secure their purchase and the share price will go up . . . (in simple terms)


  • #5
    the-lad
    Closed Accounts Posts: 155 ✭✭the-lad


    Hi
    Just wondering what is required to set up this type of account?
    Do you have to keep a minimum balance etc?
    thanks


  • #6
    homer911
    Registered Users, Registered Users 2 Posts: 5,150 ✭✭✭homer911


    I have one of these share dealing account myself - completely free depending on the type of current account you have with them. You need another account in NIB to settle any purchases and must have the funds available at time of placing the order, even though settlement is a few days later. Purchases are almost instant.


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