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Questions tagged [bid-ask]

For questions related to the pricing details of securities in markets where there exists the notion of "resting orders" or an "order book".

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1 answer
106 views

How does a stock's order book determine which trades to execute first?

Let's say for a hypothetical stock "S", the current bid and ask prices are $9.00 and $11.00 respectively. To my understanding, these prices are at the top of the order book and represent the ...
1 vote
3 answers
3k views

What do I need when I want to go short?

When I buy an asset and go long, then I order the asset with the BID-Price. If I sell it, then I need the ASK-Price for the sell order. What do I need when I want to go short? Is the following ...
0 votes
1 answer
847 views

How to read CDs: price vs yield vs bid vs ask?

I'm trying to understand CDs by comparing the two: NAME CLOSING PRICE CLOSING YIELD CURRENT BID YIELD CURRENT BID PRICE CURRENT ASK YIELD CURRENT ASK PRICE Mountain Commerce Bank 99.68 5.694% 99....
2 votes
1 answer
137 views

How market orders are filled?

When we look at the stock price S of a stock, then if I am correct S is equal to the average between the highest bid and the lowest ask for this stock. Hence since the highest bid is lower than the ...
2 votes
1 answer
343 views

Do I pay bid-ask spread if I trade on the NYSE?

From what I understand from this market-maker versus specialist discussion on Investopedia, the job of the specialist is to bring buyers and sellers together as opposed to a market-maker who buys from ...
1 vote
1 answer
175 views

Why do market-makers price themselves?

Why bother with an army of quants and complicated pricing models? Why not just use the market price to set your bid/ask and adjust the spread to something sensible and profitable? I understand if ...
2 votes
2 answers
2k views

Do market-makers always quote a bid and ask simultaneously?

I am trying to understand some market-maker (MM) data that I have. As a follow-up to a question I read about MM and to this piece of information on Investopedia, Market makers must maintain ...
24 votes
3 answers
38k views

How does a dealer (or market maker) earn the bid-ask spread on a stock?

If I am correct, dealers purchase assets for their own accounts, and later sell them for a profit from their inventory. But the spreads is the difference between buy (or "bid") prices and sell (or "...
-1 votes
1 answer
218 views

Market-maker's *ask* below current *bid*

I am reviewing some market-maker raw data and sometimes I see the following happening. The market-maker quotes an ask price that is below the current bid price (of let's say, the market itself). How ...
6 votes
3 answers
3k views

If the spread goes to the market-maker, is the market-maker the exchange?

I understand that the bid-ask spread is the difference between the price a buyer is willing to pay and the price a seller is willing to take for an asset. I also understand that this difference goes ...
1 vote
2 answers
428 views

What is the role of a market-maker?

I am trying to understand the role of a market-maker. So, the best bid and offer depend on where orders are resting, and these orders are from retail investors or institutions or whoever. Why is it ...
2 votes
1 answer
851 views

How do market-maker orders get filled?

My understanding is that a market-maker profits by selling at or above ask and buying at bid or below in securities where there is a bid/ask spread and that's how they make money. If that's, correct ...
2 votes
1 answer
1k views

Does a market-maker make any money in a liquid asset with tight bid-ask spread?

In a liquid asset like SPY, is there any market-maker making markets? It seems that with such tight spreads, there is no incentive for the market-maker to operate in this underlying. But then, again, ...
0 votes
1 answer
33 views

Does Sell Call/Sell Put affect a share price

I am using a option flow provider that cost about $99 a month. Its filter by default only trigger on "Ask/Above Ask" for call & put , but Bid/Below Bid (namely sell call/sell put) is not ...
0 votes
3 answers
160 views

Triggering a conditional sell order on the bid price

I recently set up a trailing stop sell order for an illiquid security that was triggered by the bid price going above a certain threshold. My rationale to trigger on the bid price was an attempt to ...
6 votes
7 answers
11k views

How to remember and not to mix the bid and ask prices

Maybe it seems a very silly question but I think it is not. I am working as developer for a firm and I have a huge problem to remember and distinguish what the bid and the ask prices are. I know that ...
1 vote
1 answer
39 views

Why bid price is used while calculating Forex cross rates?

I was trying to understand how Forex cross rates work. Different articles on internet uses bid price of currency to identify it's current value. My question is, why do they chose bid price and not ...
2 votes
1 answer
63 views

Best way to determine price of an asset based on set of seller and buyer offers?

Lets say we have a fungible asset (stocks, gold, currency, crypto, etc.) that is freely traded on a market. The way this works is that people can submit buy and sell (bid and ask) offers. If a sell ...
0 votes
1 answer
1k views

Putting it all together: bid, ask and last prices

I have recently started to trade options and am having trouble putting together the bid, ask and last prices. Let me tell you where I am currently at and please correct me if I got anything wrong. ...
0 votes
0 answers
59 views

How can the ask price be higher than the bid price in the stock market? [duplicate]

I recently checked the bid and ask price in the Apple stock, and I found that the ask price was higher than the bid. Why is this? Apple Stock Image I thought that bid was supposed to be higher than ...
0 votes
2 answers
3k views

bid/ask bid volume/ask volume and tick data

So far i've only traded some on plus500. Here are my questions: I don't really understand how things work in the background. I've understood that the ask price is the best sell offer available, the ...
0 votes
0 answers
33 views

For a trade bid must be at least the ask, but what price is actually chosen when they are not equal? [duplicate]

Example: I put in a buy order for one share at $100 Someone puts in a sell order for one share at $90. Clearly this will result in a trade. But at what price?
1 vote
1 answer
48 views

How is Ask calculated on an exchange?

How are Bid and Ask calculated? If someone offers to sell a single share of a stock at twice yesterday's price at closing, does that inflated price become the Ask? Or is Ask an average of some kind, ...
1 vote
1 answer
172 views

Who's on the other side of very illiquid option contract trades?

So I've been short selling Deep-in-the-Money, far from expiration Put Options on an ETF for about a year now, to profit from upward price movements on the underlying and time premium decay. Volume for ...
0 votes
1 answer
57 views

option best ask doesn't move unless I place an order lower than the best ask

as in the picture.Before I placed an order.The best ask was 0.35 and did not move at all.This option's volume was very low. And then I placed a 0.30 sell order, size was 73. Suddenly the best ask size ...
0 votes
1 answer
103 views

Is a hidden order that's higher than the bid price prioritized over the bid price?

For example. If the bid price is $1.00 and the ask price is $1.02, and I submitted a hidden order to buy at $1.01, my hidden order will be prioritized over the $1.00 bids, right? I'm asking because I ...
3 votes
3 answers
1k views

Backtesting daytrading strategy, how to handle the spread?

I am currently developing a daytrading application which based on rules and algorithms buys or sells stocks, which right now might buy/sell a stock in the magnitude of 100 per day. I am trying to ...
0 votes
1 answer
74 views

Bid/Ask volumes on stock markets

I recently got into buying some low volume stocks (mostly at NYSE) and noticed that sometimes when I buy/sell I get slightly different execution cost then when I hit the sell/buy button. I've figured ...
2 votes
2 answers
162 views

Bid/Ask when trading ETFs?

Let's say it's an index-tracking ETF. Isn't the ETF price determined by the index value? Why does it have bid/ask spread then? Could someone explain the bid/ask concept when trading ETFs?
1 vote
1 answer
410 views

What is bid size and ask size in wealth simple?

I'm new to wealthsimple app and wanted to know what some numbers mean. If we look at Microsoft stock for example and look at these numbers shown in the app: Bid $259.87 x 17,481 Ask $259.90 x 10,387 ...
0 votes
1 answer
56 views

Does the difference between a marketable limit order's price and the bid-ask price influence the priority of the order?

A stock is $10 bid and $11 offered. Alice places a marketable buy limit order with a limit price of $12 per share. At exactly the same time, Bob places a marketable buy limit order with a limit price ...
3 votes
1 answer
129 views

Ask & Bid yield calculation problem

Does anyone know how the ask and bid yields are calculated on this corporate bond? I tried to use BEY calculation but I keep arriving at different answers. Does anyone know what the $500K means? If ...
8 votes
3 answers
3k views

When I buy a stock, should I track the bid price?

If I bought a share for $1000 (bid: $996, ask: $1000) and I want to take a profit of $20, should the stock price move up by 2% (20/1000) or 2.4% (20/1000 + 4/1000)?
3 votes
1 answer
1k views

Can a retail trader do bid-ask spread scalping through algo-trading?

Is it legal/permitted in the US public stock markets for an individual retail trader to do bid-ask spread scalping through algorithmic trading? Do I need to follow some procedure before I can ...
3 votes
2 answers
596 views

Why do market makers sometimes quote absurd bid and ask prices rather than remove their quotes?

The image below shows the Level 2 bids for Fortescue Metals Group Ltd (OTCQX: FSUMF) on 2020-10-07 10:20 am: Notice the 0.01 × 10,000 bid by NITE (Virtu Americas LLC), which is extremely unlikely to ...
4 votes
1 answer
163 views

Why didn't my buy limit order become the highest bid?

I am trying to buy a stock that is $307 bid and $312 offered. I placed a buy limit order for 1 share at $307.10. However, the best bid remained at $307.00. After an hour, the best bid is still $307.00....
1 vote
1 answer
303 views

Backtesting using only Bid or Ask Price

I have a dataset containging one minute bid OHLC prices for a particular stock. Would it be reasonable to back test a trading strategy based on this data that only has bid prices? I am asking this ...
1 vote
2 answers
289 views

Should I consider the bid-ask spread as part of the transaction cost of a market order?

When I place a market order or marketable limit order that successfully executes, should I consider the bid-ask spread as part of the transaction cost of my order? The bid-ask spread is appears to be ...
-3 votes
2 answers
159 views

Bid and asked confusion on a scam site? [duplicate]

Which price is for the buyer here?
0 votes
0 answers
69 views

Asked or Bid price which one is right

I recently bought shares on a market where I normally buy and we're confirmed at asked price sorry not bid please see attached pictures and number of shares were confirmed and a congratulations note ...
1 vote
0 answers
77 views

is it possible that a stock trades and stamp prices above the bid and the ask price?

I noticed today when looking at the bid and ask of a stock that the bid was 6.02 and the ask was 6.08 and the time and sales were stamping prices of 7.20 despite having bid and and ask unchanged. Is ...
0 votes
1 answer
128 views

Question about BID vs ASK at the start of Day Trade

So I have been monitoring this IPO recently. Day trade starts and we are allowed to post bid and asks for 30 minutes before the market officially opens. I see asks for around 40 for 4500 shares. ...
1 vote
5 answers
369 views

How are retail forex brokers different from betting shops?

I'm struggling to find differences between bookmakers and retail forex brokers (e.g. OANDA). The former deals with horse racing, greyhound racing and sports, while the latter deals with currency ...
2 votes
4 answers
939 views

How do market makers profit from the bid-ask spread when bids are almost always lower than asks?

I am familiar with how currency exchange booths at airports make some of their money: from the bid-ask spread. For example, they will say: "you can sell us 1 USD for 1.32 CAD, and you can buy 1 USD ...
1 vote
4 answers
578 views

Sometimes the Time & Sales shows trades in between the bid and the ask. How is that possible?

White prints on the Time & Sales means that a trade happened in between the bid and the ask. How is that even possible? The only two answers that come to my mind are. There was a hidden order in ...
1 vote
1 answer
87 views

Mechanism of sudden bid-ask spread changes

Bid and ask chart are sometimes very different in its shape, like this bid chart and ask chart (USD/JPY, @OANDA platform). At around 7:00AM on its ask chart, ask price ranges between 103.580 to 103....
1 vote
1 answer
141 views

What are "regional bid and ask prices"?

I was reading Schwab's market data catalog. Excerpt: NYSE Pro New York Stock Exchange (NYSE) offers Level I quote data for all NYSE-listed stocks and ETFs, providing: • Trades • National Best Bid and ...
0 votes
1 answer
70 views

In over-the-counter markets, shouldn't price takers attempt to match each other's prices?

From what I understand, a market maker buys at bid price and sells at ask price, whereas the price taker involved with the market maker buys at ask price and sells at bid price. Basically, the market ...
0 votes
1 answer
54 views

Bid/Ask spead for an ETF

I have been looking here for the information on the Bid/Ask spread of the Vanguard Ftse All-World Units Etf A on the Italian market. Here it is reported "Ask: n.d. X n.d" and "Bid: 84,...
1 vote
1 answer
81 views

Volatility and Call Options

Say I own an in-the-money call option that I want to sell for profit. I learned that higher volatility leads to an increase in the "price" of a call option in order to compensate for ...