3

Typically, I am accustomed to seeing things like {"ask":1.0123, "last":1.0118, "bid":1.0113} but every now and then I'll catch something doing {"ask":1.0118, "last":1.0123, "bid":1.0113}, what, if anything is this a sign of? My best guess is that you have less ground to cover in order to meet your sell goal.

8

It means that the market has dropped and someone is willing to sell below the last traded price. So there is some level of selling pressure that is driving prices down.

could the beneath last ask be an indication of a currency that is, or about to, enter some sort of down fall?

Not necessarily. Certainly it means that there is some downward pressure, but it's not such a strong signal that I would panic. It could just mean that there was recently a spike and the market is cooling back down.

  • I am looking specifically at cryptocurrency markets. If I purchase something I am looking to sell it at a certain rate above what I bought it at. The closer that ask is to the bid the less of a journey I have to make my profit, which is one way to look at it, however, could the beneath last ask be an indication of a currency that is, or about to, enter some sort of down fall? Thanks again. – Never Nor May 13 at 6:03
  • Well, technically, it does indicate a decrease in price ... of 5 basis points. – Acccumulation May 13 at 15:49
1

A locked market is where a buy order at one exchange isthe same price as a sell order at another exchange.

A crossed market is when the bid price of a security exceeds the ask price.

These can happen for several reasons.

  • There are multiple exchanges operating at different speeds and proper bid/ask matching fails.

  • It's a fast market where there's a high influx of orders, occurring most often on the Nasdaq during after market hours

  • It's a stale quote that market makers failed to remove

  • Locked and crossed markets are terms defined in the order protection rules of US securities exchanges (protected markets). For equity markets they should generally not occur at all. For the reasons: (1) Exchange speeds generally operate now in the sub millisecond level now, so should not be an issue. (2) The after hours markets are not protected so locks and crosses are allowed. (3) Stale quotes are usually market data issues rather than real quotes (sometimes on the exchange side). – xirt May 12 at 4:36
  • Perhaps locked and crossed markets "should generally not occur at all" but I occasionally see locked markets during regular trading hours, despite exchange speeds operating now in the sub millisecond level now. Crossed markets are much rarer but they too pop up once in awhile. I think that observance is directly proportional the amount of screen time. – Bob Baerker May 12 at 10:57
  • The exchanges are generally required to not to lock the markets under the order protection rules, though some allow members to submit orders in such a way that they can lock markets (certain order types may allow it). Those members are subject to regulatory penalties if they do it too much without reasonable explanation (it is a minor rule violation). There are some circumstances where they can occur naturally (e.g. two participants submitting opposite orders to different exchanges at the same time), but usually the locking participant should remedy the lock and correct it promptly. – xirt May 13 at 0:39
-1

The difference between the bid and the ask is called the spread. It just shows the price difference between the best priced buy order, and the best priced sell order.

If someone submits a better priced buy order that does not yet reach the price of the best sell order, the bid price will update to reflect that new buy order, and the spread will narrow.

Similarly, if someone submits a better (lower) priced sell order that does not reach the price of the best buy order, the ask price will update to reflect that new order and the spread will narrow.

If someone submits a buy order that matches (or is priced higher) than the best (lowest) priced sell order, a trade will occur and the price of that trade will be displayed as the 'last' price - i.e. the price of the last trade. If the order was big enough to fill the best priced sell order, then the next best priced sell order will be displayed.

This is how the order book operates on most continuous auction trading markets. To get the hang of it, try using a paper trading account to see how the order book works.

The bid, ask and last price don't provide much information about what the market is going to do next, but rather just the state of the market at a given point in time. Some would argue that the market is usually driven by principles of supply and demand while others could argue that it moves randomly.

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