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I'm willing to buy some stocks from specific holdings. And on the trading tool there is a portion shows bid and ask list. Here I attached the screen shot of the window.

What is the side (bid / buy) I have to look for placing new buy order with lowest price?

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If you are buying your order will be placed in Bid list. If you are selling your order will be placed in the Ask list.

The highest Bid price will be placed at the top of the Bid list and the lowest Ask price will be placed at the top of the Ask list.

When a Bid and Ask price are matched a transaction will take place and it will the last traded price.

If you are looking to buy at a lower price, say $155.01, your Bid price will be placed 3rd in the Bid list, and unless the Ask prices fall to that level, your order will remain in the list until it trades, it expires or you cancel it. If prices don't fall to you Bid price you will not get a trade.

If you wanted your trade to go through you could either place a limit buy order closer to the lowest Ask price (however this is still not a certainty), or to be certain place a market buy order which will trade at the lowest Ask price.

  • your explanation much help full. Thank you so much. One more question. If my bid is 155. Same time if one ask price is 154. Without other compititors will I get the stock? and if so what would be the price I will get (155 / 154)? – sugunan Feb 12 '16 at 11:43
  • If your bid is $155 and the lowest ask is $154, yes your order will be executed and you will buy the stock. At what price may depend on the Exchange. In Australia on the ASX you would have bought for $154, but on other exchanges it might be the other way around. – Victor Feb 12 '16 at 21:49
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When I first started working in finance I was given a rule of thumb to decide which price you will get in the market:

"You will always get the worst price for your deal, so when buying you get the higher ask price and when selling you get the lower bid price."

I like to think of it in terms of the market as a participant who always buys at the lowest price they can (i.e. buys from you) and sells at the highest price they can. If that weren't true there would be an arbitrage opportunity and free money never exists for long.

  • Simply I want to understand this screen shot. Could you please explain what is BID and ASK mean on it? Buyers order listed on BID or ASK column? – sugunan Feb 12 '16 at 9:33
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    @sugunan Buyer order is BID. And Sellers order is ASK – Dheer Feb 12 '16 at 9:49
  • @Dheer this is the perfect answer. Thank you very much. – sugunan Feb 12 '16 at 11:37

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