Posted in Marketing and Strategy Terms, Total Reads: 431
Definition: Below The Market
Below the market is used in reference to the share or stock markets. It means that an order is given to sell or buy a stock below the prevailing prices of the stock. Such an order is placed on the basis of certain considerations which helps the owner of the stock to gain from it. The order is placed at the lower price than the prevailing prices which exposes it to the risk of never being met. That is, if the stock price is growing then the order which is placed at below the market price will never be met. Hence, the execution of the order may or may not take place.
For example, the price of the prevailing stock is Rs.100 and a person places an order of buying the same stock at Rs.95. This phenomenon of placing an order for the stock below the prevailing prices is known as Below the Market. The order of Rs.95 may or may not be executed. Similar is the case with selling the stock below the market price.
Before placing such an order the buyer or the seller of the stock ideally looks into the various factors which would affect the value of the stock. For instance, a buyer of the stock would buy the stock at a lower price if he thinks that the stock is going to perform well in the future. A seller on the other hand would place a sell order if he thinks that the stock would not perform well in the future. These are one of cases. There can be many cases which would make the stock buyer or seller place such an order.