You will never know exactly who is on the other side of the transaction, but trying to understand who is buying from you, and why, can help you become a better investor. Whatever the reason, the person buying from you might have a different time frame or opinion, or simply a cooler head. Institutions account for 75 percent of all trading, so chances are you will be selling your stock to a professional — a specialist or market maker, an institutional trader, a mutual fund, a pension fund or a hedge fund.

The New York Stock Exchange has specialists assigned to maintain an orderly market in specific stocks.

NASDAQ market makers — institutional traders who specialize, or make market, in specific stocks — essentially do the same. These guys trade the same stocks day in and day out for tiny profits, making money on volume. They are often on both sides of a transaction — both buying and selling. They can buy your shares and resell them in a matter of seconds for a tiny markup. In addition to a different opinion, a portfolio manager at a mutual or a pension fund often has a different time frame.

You might be cashing in your profits now, but a mutual fund could be looking two or three years down the road. Because they deal in millions of shares, funds take weeks or even months to accumulate positions in specific stocks.

Your sell order might meet their standing order to buy at a specified price. A professional trader is most likely to trade against you: Your loss is his gain.

He buys from you because he thinks he can resell your shares at a profit. Professional traders often try to shake retail investors out of their positions by orchestrating sudden price drops to induce them to sell.

Officers and directors know their companies best and can be more patient, buying shares when nobody wants them, and holding them for years to realize their profits. Based in San Diego, Slav Fedorov started writing for online publications in , specializing in stock trading.

He has worked in financial services for more than 20 years, serving as a banker, financial planner and stockbroker. Now working as a professional trader, Fedorov is also the founder of a stock-picking company.

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above.

Skip to main content. Who Buys Stocks When You Sell? More Articles Who Buys Stock That Is Sold on the Market? Does Increasing My Tax Deductions Lead to an Audit? Whole Life Insurance Tips That Will Save You Tons "What Does ""Tendering Notes"" Mean? Market Participants Institutions account for 75 percent of all trading, so chances are you will be selling your stock to a professional — a specialist or market maker, an institutional trader, a mutual fund, a pension fund or a hedge fund.

Larry Robbins Buys Dow Chemical Co, Intel Corp, Shire PLC, Sells Healthsouth Corp, HCA - gohabizaw.web.fc2.com

Specialist or Market Maker The New York Stock Exchange has specialists assigned to maintain an orderly market in specific stocks. Investment Funds In addition to a different opinion, a portfolio manager at a mutual or a pension fund often has a different time frame. Professional Traders A professional trader is most likely to trade against you: Insiders Officers and directors know their companies best and can be more patient, buying shares when nobody wants them, and holding them for years to realize their profits.

References 1 The Boston Institute of Finance Stockbroker Course: Series 7 and About the Author Based in San Diego, Slav Fedorov started writing for online publications in , specializing in stock trading. Recommended Articles Tax Breaks on Timeshares Can Retired Persons Transfer a k to a Roth IRA?

Sound Mortgage Planning Does Disaster Mortgage Insurance Cover Spousal Death? Related Articles Warrants vs. Stocks Can I Claim Disability If I Am Retired? How Does a Cash Dividend Directly Lower the Value of a Share of Stock?

What Is the Most Basic Factor That Affects Stock Price? How to File Past Year Tax Returns. Ratios Used in Predicting Stock Prices Can an IRA Be a Marketable Security? Trending Topics Latest Most Popular More Commentary.

Quick Links Services Account Types Premium Services Zacks Rank Research Personal Finance Commentary Education. Resources Help About Zacks Disclosure Privacy Policy Performance Site Map. Client Support Contact Us Share Feedback Media Careers Affiliate Advertise. Follow Us Facebook Twitter Linkedin RSS You Tube.

PMM Chapter Flashcards | Quizlet

Zacks Research is Reported On: Logos for Yahoo, MSN, MarketWatch, Nasdaq, Forbes, Investors. Logo BBB Better Business Bureau. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.