Often times I find that the number of bid and ask quotes presented for a stock are quite small in number. For example, just today I was watching a stock whose bid and ask prices looked very similar to this at one point during the day:
Bid: $3.20 x 22
Ask: $3.23 x 8
I followed the stock (which currently has an average daily volume of over half a million) throughout the day and neither the bid nor ask sizes ever rose to much more than 20. This is not the first time I have seen something like this. Now, if I place a limit order in the situation above for 1000 shares at $3.23 per share, what keeps the stock price from rising drastically and preventing my entire order from being filled? If the ask size is so low (only 8 at this particular price), would I not be able to obtain only 8 shares at $3.23 before the ask price rises to a higher value? At which point the price has already risen and I still have 992 shares to buy?
I have always been under the impression that with higher volume stocks any individual trade will not affect the price much, but seeing how small the bid and ask sizes are, I don't understand how this works. Is this, perhaps, because as my order is being fulfilled more and more ask quotes at $3.23 are being constantly placed?