Liquidity of Preferred Stocks

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jlijli
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Liquidity of Preferred Stocks

Post by jlijli »

Hello,

I'd like to purchase some preferred shares, but would like to find out how easy it is to sell them. Is there anyway to find out beforehand? I am looking at preferred shares issued by big banks (e.g. BMO, RY), and am not interested in ETFs.

Thanks a lot.
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AltaRed
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Re: Liquidity of Preferred Stocks

Post by AltaRed »

Welcome to the forum. You might peruse the last 10 pages or so of the Preferred Shares thread for some answers. But to respond directly, the prefs trade on the stock exchange just like common equity does BUT volume is quite low in comparison and Bid/Ask spreads can be significant. The best suggestion I can make is to monitor the trading activity of the issues you are interested in. Use your trading sofware to monitor bid/ask spreads and volume for awhile, or if you do not have trading software, use TMX Money to get quotes on your issues.

Always use a Limit order to avoid being caught by a high Ask price for the quantity you are buying. If you are looking, for example, for a 1000 share or more purchase, it is especially important to use a Limit order.... or to split your purchase in at least 2 purchases over different days. The same applies in reverse when you go to sell. Watch volume and the Bid prices and use limit orders to avoid low Bid prices.

Edited: for sales vs purchase per OP post
Last edited by AltaRed on 23 Apr 2017 10:56, edited 4 times in total.
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Thegipper
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Re: Liquidity of Preferred Stocks

Post by Thegipper »

I t can be a slower process. My broker gives you info on the price of current bids and sells with the allotments of each. I sell within that range using limit orders. I have not encountered a problem. If you had a big holding you might be advised to sell in smaller parcels.
jlijli
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Re: Liquidity of Preferred Stocks

Post by jlijli »

Thanks a lot for the answers. They really help. I wasn't aware that I could get such info on TMX Money.

Yes I think I can also get a better idea looking at the current bids and sells via my online account.

Thank you.
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