The price of public company stock depends on a free market that matches up buyers and sellers. For all practical purposes, unless you are lucky enough to hold restricted stock as an executive of a big company, you can sell your stock at any time the markets are open and there’s a willing buyer. Public company stock trades on exchanges, such as the New York Stock Exchange and Nasdaq, or between traders on over-the-counter markets.
Market Trading Hours
You can generally only sell stock while the market is open. The New York Stock Exchange and Nasdaq are open between 9:30 a.m. and 4 p.m. Eastern time Monday through Friday, excluding holidays. If you have an urge to sell stock on the weekend, you have to wait until the market opens on Monday. Some smaller exchanges and networks allow after-hours trading, but trading at this smaller scale comes with risks, such as lack of transparency and possible pricing inaccuracies.
Occasionally, the stock exchange may halt trading in a particular stock, such as if a company is about to announce news that will affect the stock price or when it’s unclear if the stock meets exchange listing standards. A significant imbalance in buy and sell orders may also lead to a halt. Frenzied trading can require a trading halt; in 2008 Nasdaq suspended trading in United Airlines when a newspaper incorrectly reported that the company was filing for bankruptcy. A trading halt usually lasts less than an hour, but the Securities and Exchange Commission can suspend trading for up to 10 days.
You can only sell a stock, like anything else, if someone is willing to buy it. In the vast majority of cases, you will find a buyer for your stock, even in a down market, although you may lose a lot of money on the sale. Occasionally a stock will fall so much in value that no one wants to buy it, the price declines to pennies and it gets kicked off the stock exchange. If this happens, you may still be able to sell the stock in an over-the-counter market.
If you hold stocks in an account that receives special tax treatment, such as a retirement account or college savings account, you are still free to sell those stocks at any time. However, if you withdraw the money you get from selling them, you may incur taxes and a penalty. The trade-off for the favorable tax treatment of these accounts requires that you leave the assets in the account until the specified time that you're free to withdraw them, although you can buy and sell your holdings within the confines of the account.
- Securities and Exchange Commission: After-Hours Trading -- Understanding the Risks
- Securities and Exchange Commission: Trading Halts and Delays
- The New York Times: A Mistaken News Report Hurts United
- USA Today: Stocks Usually Find a Buyer, if the Price Drops Enough
- CNN Money: What If I Hold the Stocks in a 401(k) or IRA?
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