Originally posted by LynahFan
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Example 2 is also easy - assuming your order to buy 400 shares was at the market price, you'd get them for $49 and set the new price, with the current ask still at $49.
Example 3 depends on your buy order - if you buy at the market price, you'd pay $55 because that's the current ask and set the new price.
Example 4 - no sale happens because the bid and the ask don't match, therefore the listed market price stays at $50 because that is still the last recorded sale. Someone else would need to come in or someone needs to flinch.
If you delve into the markets, you'll see the highest bids and lowest asks outstanding for a given stock. High frequency traders and the brokerages will make money off the spread by buying at the bid price and then hopefully reselling at the ask price over and over and over again (or vice versa, selling at the ask and then hopefully re-buying at the bid). So for retail investors like you or me trying to sell 100 shares of a stock, the brokerages will often simply handle that themselves by buying your 100 shares at the bid price and then turning around and selling them at or slightly lower than the latest ask price (or vice versa, they'll sell shares to you at the ask price and then rebuy them at the current bid price or slightly higher).
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