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Home » Trading

How do I gauge how many shares of a stock I can purchase or sell without effecting it’s price?

Submitted by on March 10, 2010 – 11:56 amNo Replies


A web user asks, For example, say we have a security with price $20 & avg daily vol of 1m share. That’s $20m a day infused into the stock divided by 390 (the # of minutes in a trading day) that’s about $51,200 a minute that changes hand in that stock. If I see a trading opportunity and want to buy $100,000 worth of stock that minute how will that affect the price? Is there a factor like 2X, 3X, 4X, etc that I can use to know how much more (or less) than the normal 1 minute dollar flow I can successfully trade. Also, I use limit orders so I can’t just put in a market order and accumulate shares over a few minutes until I’m filled. This is a day trading strategy so price is very important to me and often times I need to get filled that minute.

Thanks for the help!

Can you help them out? Post your advice!

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