Market Order Higher Price Than Total for Day?!

[w1lz]

Hello,

I'm new here, hi!

I'm also new to trading and really just learning the ropes with small change at the mo. I currently have an account with De Giro. I have purchased shares in about 6 or 7 companies, for long term returns. I recently had a look back through my account and realised when i have made a trade i appear to pay higher than the highest price of the day. So for example i bought in a smaller company who peaked at 42gbx for the day, yet i paid 43gbx per share?

This has happened on numerous occasions and the more expensive the stock the bigger the difference. Can someone shed some light as to why this is happening?! I purchase day orders or good till cancelled.

I have emailed De Giro to try and clarify they just emailed me back to say this is the price they paid, but how can it be when it peaked lower?!

Any help would be much appreciated!

Thanks,
Will

 

[tomorton]

When buying shares, the broker quotes two prices - "bid" and "offer". "Bid" is the price you will have to bid to buy it: "offer" is the price which they will offer to buy it back from you. Because they want a profit from the difference, the offer will be lower than the bid. The difference is the "spread".

What you will see quoted in the media and on charts etc. is usually the mid-price, i.e. the average between the two.

Small companies with low market capitalisation often have a wider spread than large caps. In your example I guess 42 was the day's mid-price, but as you paid 43, the spread would therefore be 2GBX. This is wide, but that's what happens when brokers deal in small cap shares. The bid/offer spread on a large cap stock would be much narrower, perhaps a fraction of a penny.

 

[Quantt]

This is strange, for the US and Canadian markets, all quoted historical prices are real deals that went through and are not related to the spread...

 

[w1lz]

Brilliant thank you tomorton. This explains it greatly.

Final question: do different brokers set different margins or do they all stick to the same?

Thanks

 

[tomorton]

Brilliant thank you tomorton. This explains it greatly.

Final question: do different brokers set different margins or do they all stick to the same?

Thanks

If you mean spreads, they set their own, but they probably don't vary much from each other. Be aware that even the same broker's spread on the same share can be opened or narrowed depending on the time of day, news events, company announcements etc. This is of course much more significant on the small caps.

If you mean margin or leverage on your account, likewise, they set their own.

 

[w1lz]

Thanks very much for your help!!