What is a Share Price?

What is a share price? This seems like a very obvious question, but it is important to understand the prices offered by your broker, and how to set a ‘limit price’.

Share-dealing has its fair share of jargon, but you needn’t be intimidated by it. When a broker quotes a share price, these are the terms you should know:

The bid-offer spread

A broker who is dealing in shares doesn’t just quote one price for each share – he quotes two. One price (the higher one) is the price at which you can buy the share, known as the ‘offer’ price. And the other price (the lower one) is the price at which you can sell the share, known as the ‘bid’ price. The difference between these two prices is known as the “bid-offer spread”.

For penny shares the bid-offer spread can be large.  That means if you sell the shares soon after you have bought them you may make a loss, and that’s the case even if they haven’t gone up in value or they have only gone up by only a small percentage.

The mid-price

The mid (middle) price is the price half-way between the bid and offer prices. The mid-price is the most frequently quoted price in the newspapers, but you cannot actually deal at the mid-price.

Setting a limit buy price

When you contact your broker you can set a limit on the amount you are prepared to pay for the share. You do this by telling your broker you want to set a “limit buy price”.

We go into share prices in a lot more detail, giving you examples  and taking you through an easy to follow, step by step guide into the exciting world of penny shares in our two starter handbooks - How To Buy & Sell Shares For Profit and How To Make Big Money In The Exciting World Of Penny Shares

And the best part is that you can receive these two guides absolutely FREE when you try Red Hot Penny Shares today.

We are offering you the chance of trying our service for one whole month, with no obligation. You will receive all of the following, which are yours to keep regardless of what you decide.

• An instantly downloadable copy of the latest issue
• A FREE book: How to Buy and Sell Shares For Profit
• A FREE book: How to Make Big Money in the Exciting World of Penny Shares
• A FREE report: Your 10 Simple Rules For Maximising Your Penny Share Profits

BUT if during your 1 month trial you decide Red Hot Penny Shares is not for you; simply call our customer service hotline on 020 7633 3601.

Here is just a small selection of other frequently asked questions that will be covered in full in our FREE handbooks.

What are shares?
Well, as their name suggests, if you hold shares you own a share of a company… Read more

Where do I buy shares?
The best return comes from the Stock Market… Read more

How do I buy and sell shares?
When you want to buy and sell shares, you have to do this through a stockbroker. First of all, you’ll
need to set up an account. This is easy… Read more

How much will buying and selling shares cost me?
Unfortunately there are charges involved in buying and selling shares… Read more

How much money do I need to start investing?
The first key point is that you should only invest spare money you can afford to lose… Read more