Hopefully this isn't too basic of a question, and I've posted in the correct place. I've found that certain stocks average 1.5% growth on IPO day. That is, the day that certain stocks first put shares onto the market, the price goes up by 1.5% between the market open and the end of day price (data from Google finance). Is that too small a change to profit on, because of the difference in the bid and ask prices? That is, say the bid-ask spread averages 2% of the open price on IPO day (Draho, 2004, p254). And I put in an order with my broken to buy 1,000 shares of the stock when the market opens on IPO day. Does the order actually get filled at slightly above the market open price (bc the market open is an average of the bid and ask, right?)? And when I sell at the end of the day, does it sell at slightly below the market price at that time? Another way to ask this: if a stock has a bid-ask spread that's 2% of its open price throughout the day, and the price I see in the Google finance chart goes up by 1.5% between morning and end of day, does that mean that buying in the morning and selling in the afternoon will actually net -.5%? Thanks
So opens at 99p, Bid 98p Ask 100p then right ?? your buying at market so 100p. 1.5% gain puts it at 101.5 say, then bid if likely 101p I guess so your up 1%, if that happens ofcourse. You can join the cue at 98p with a limit, if you get enough sellers you might get filled, then you can sell ofcourse at the Ask end of the day or atleast try. So Buy 98, sell 103 for instance. I think!!