Investing in stock seems a relatively simple venture on the surface -- your broker places an order, purchases stocks and holds them in an account for you. However, numerous factors affect stock transactions, from the number of shares available to fluctuations in price and unfavorable order conditions. Determining how much you pay in the event of a partial fill, one such stock order impediment, depends upon the specifics of your order.
A partial fill of stock occurs when you cannot purchase all the shares requested from an order. For instance, you place an order for 500 shares in Company X but only receive 100. Partial fills usually occur because insufficient shares exist to fill our order or because owners of shares prove unwilling to sell to you at a certain price. Companies issue a finite number of shares, which may result in an insufficient availability for satisfying orders.
You only pay for the shares you actually purchase when you place an order. If you request 1000 shares in Company Y but end up with a partial fill of 750 shares, you only pay for the 750 available shares. The amount you pay for shares depends upon your stated price, market value and price desired from seller. If you offer $15 per share for the 750 shares, those shares hold a market value of $16 per share and the seller values the shares at $17, your broker negotiates a price with the seller.
Multiple Transaction Orders
Large orders of stock commonly come from multiple sources. For instance, if you place an order for 500 shares in Company Y, Company Y itself may sell you 100 available shares. Another 150 shares may come from Broker X and 50 more shares from accumulated private investors, for a partial fill of 300 shares. Each of these sellers may stipulate a different selling price. The total price you pay on a partial fill ultimately comes down to the number of transactions, the totals shares purchased and the buying price of each share.
Various other charges are attached to stock purchases. For instance, brokerages charge for the action of filling an order. Some brokerages may offer a reduced price in the event of a partial fill. Online brokerage Zecco, for instance, waives commission charges on partial fills. When a partial fill occurs, you can cancel the rest of the order or leave it. If you leave it, the order may fill over time. In such instances, you end up paying the full price of the order once it fills.
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