undefined | Better HN

0 pointsCobrastanJorji5y ago0 comments

Question: if the price is literally zero, does that mean it can it be purchased for $0, that it's not for sale, or that there are literally no requests to buy it so the price can't be measured?

0 comments

phire5y ago

It's not actually zero.

There some sells at the minimum price of $0.0001. But nobody is actually buying them. There is no room in the order book for buys. No trading is taking place.

Some stock APIs report this as $0.00, others report it as $0.0001. Both views are correct, you could buy some shares shares at $0.0001, but you can't sell any.

dheera5y ago

Me too. If it's $0 can I "buy" a million shares of it?

arthurcolle5y ago

No you can't. A bid/offer of 0x1/0.05x25 could be what you see (i.e. 25 shares available at the offer price of 0.05 and 0 shares available at 0 - no one wants this shit) on these garbage-quality companies. So there's no one bidding on it.

So you could come in, place a bid at 0.025 and the updated OB would be like 0.025x1/0.05x25. If there's any autoquoters from the adversaries, then ok immediately they might throw some more offers up at like 0.045x100, since the interpretation of some bids coming in means that they can fill the orders at the tighter spread

shoshino5y ago

Your first example quote has an unfortunate typo. 0x1 should be 0x0

1 more reply

routerl5y ago

I have the same question, but think we can answer it by reasoning.

If it could be purchased for $0, only the first stock would cost $0, and the price would then rise, but how would we calculate the price increase for a stock purchased at $0 that is now worth $0.1? So that's not it.

If it were not for sale, why would it be listed?

I think it's the third, and I'd further guess that any bid for the stock will be accepted, thus setting the price.

colejohnson665y ago

I thought the price was what someone was a rough idea of what people are willing to pay for it. So if it’s $0.00, why would you ever pay more than that? And if no one buys it for a penny or more, it’s “price” won’t go up.

In case it’s not clear: I only know the price is what I pay for it. I don’t fully understand where it comes from.

jachee5y ago

My understanding is that for each tradable asset, there are two prices: Bids and asks; and trades will only happen when asks and bids exist at the same price point.

Most prices we see on tickers are the lowest asks, I believe.

2 more replies

j / k navigate · click thread line to collapse