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19

The current quote is $996 x $1000 The bid represents the highest price someone is willing to pay ($996) The ask price is the lowest price someone is willing to sell at ($1,000) As a buyer at the current price, you will pay $1,000 If you want to make $20, your sale price must be $1,020. That means that the bid price must rise 2.41% (24/996) in order for your ...


17

The earliest order is the price. If the seller submits a Limit Order to Sell at $10 at 9:30 AM, it will enter the order book and $10 will be shown to the world as Best Ask. Then if the buyer submits a Limit Order to Buy at $20 at 9:31 AM, it becomes a Marketable Limit Order because $20 is better than the Best Ask of $10. The trade will be executed at $...


14

The ask price is the price the stock is sold at, and the bid price is the price people are willing to buy it for. So when you bought the stock for $1000, and you want to sell it for $1020, then that would happen as soon as the bid price is $1020. However, the bid-ask spread is not a constant. So when the bid price is $1020, then the ask price is not ...


10

The words are straight forward, bid is what someone bids for your shares; ask is what someone asks for his shares, if you care to buy them. But if the literal interpretation is difficult to remember: the higher price is always what you would pay if you buy the lower price is what you would get if you sell.


8

Market makers make the spread on market orders, only. A market order is one in which the retail buyer/seller says fill the order immediately at whatever is the best price. The market maker is buying the market-sells at the bid and selling the market-buys at the ask. If the market-buy volume equals the market-sell volume then the market maker is just ...


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 ...


6

Your logic breaks down because you assume that you are the only market participant on your side of the book and that the participant on the other side of the book has entered a market order. Here's what mostly happens: Large banks and brokerages trading with their own money (we call it proprietary or "prop" trading) will have a number of limit (and other, ...


6

You have "ask" and "bid" the wrong way around in your second paragraph. "Ask" is the amount someone is asking you to pay them in exchange for one of their units of whatever. "Bid" is what someone is currently offering (bidding) in "real" money to purchase one of anyone else's units of something. The "price" is just whatever the most recent transaction ...


6

In US public stock markets there is no difference between the actions individual retail traders are "permitted" to take and the actions institutional/corporate traders are "permitted" to take. The only difference is the cost of those actions. For example, if you become a Registered Market Maker on, say, the BATS stock exchange, you'll get some amazing ...


6

There is no perfect answer to this question, and you will always have a tradeoff between likelihood of executing the order and the price you wish to achieve. The only way to be certain to execute the order is to sell at the bid (or more accurately at the highest bid that immediately accommodates the full volume you are trying to sell), and the market's ...


6

These "absurd bid and ask prices" are called "stub quotes". A stub quote is an offer to buy or sell a stock at a price so far away from the prevailing market that it is not intended to be executed, such as an order to buy at a penny or an offer to sell at $100,000. A market maker may enter stub quotes to nominally comply with its ...


6

I thought it might be fun to add more detail on how a trade happens. I used to work as a programmer for day traders, and that was a wonderful crash course on how markets work on the second-to-second level. At its core, a market is a set of buyers and sellers seeking to make trades with each other, and they declare their intentions by making bids (an offer to ...


5

The price is moving higher so by the time you enter your order and press buy, a new buyer has already come in at that time and taken out the lowest ask price. So you end up chasing the market as the prices keep moving higher. The solution: if you really want to be sure that you buy it and don't want to keep chasing the market higher and higher, you should ...


5

Terminology Bid A bid is an offer to buy something on an order book, so for example you may post an offer to buy one share, at $5. Ask An ask is an offer to sell something on an order book, at a set price. For example you may post an offer to sell shares at $6. Trade A trade happens when there are bids/asks that overlap each other, or are at the same ...


5

There could be a number of reasons: The price hit your number ($39.70) but by the time your order hit the market, the price had gone up. Perhaps the stock went up between when you placed the stop loss and when the order was executed. A trailing stop loss will ratchet up: Very simply, the trailing stop maintains a stop-loss order at a precise percentage ...


5

After the close, traders and market makers pull their bids and offers before going home. That results in the B/A spread widening, more so for illiquid stocks. For your stock, the quote was $129.34 x $129.37 seconds before the close. Less than 10 seconds later, it was $128.92 x $129.62 and within one minute, it was $98.00 x $129.62 (note the time stamp on ...


5

This is governed not by the brokerage but by the exchange, specifically the "opening rotation" procedure. If there is a sell (limit) order at $10 and a buy order at $11 going into the open, the first trade would probably be designated at the midpoint ($10.50) for the lesser of the two quantities. But it is unlikely that these would be the only orders. More ...


5

how does a person make a profit when buying stock? You don't. Profit is made when you sell at a higher price than what you bought it at. Consider the man with an apple cart selling apples. Does he make a profit when he buys the apples from a wholesaler? Of course not. He (hopefully) makes a profit when he sells the apples for more than it cost him to ...


4

My question is would my trade likely have actually executed at that price in the morning In this specific example unlikely. The ETF is highly traded and the price in the morning when trade would get executed would be around 80. But this can happen and does happen on illiquid stocks. You will see limit orders at very low buy or very high sell price. There ...


4

Both of them are a dollar amount. They both refer to the money. The ask is someone asking for money: they are offering to sell. The bid is someone bidding a certain amount of money: they are trying to buy. Are you familiar with auction terminology? When someone bids on an item, they are offering to buy it for that price. If the person auctioning the item ...


4

This income comes from fact most people don't want to wait and just buy/sell on current price. While market maker is ready to wait and buys/sells on a better price. Here is a simple example: 1) MM puts BUY MSFT@$100 order - he is ready to buy MSFT for $100 SELL MSFT@$101 order - he is ready to sell MSFT for $101 To simplify, imagine that he has no MSFT ...


4

Odd lots (less than 100 shares) are not covered by NBBO regulations and they do not update the quote. Read this.


3

At any point of time, buyer wants to purchase a stock at lesser price and seller wants to sell the stock at a higher price. Let's consider this scenario Company XYZ is trading at 100$, as stated above buyer wants to purchase at lower price and seller at higher price, this information will be available in Market depth, let's consider there are 5 buyers ...


3

That sounds fine to me...certainly it means the right thing, even if it may not be the most common way to describe it in a non-financial context. Instead of "ask" you can use "offer price." Both of these may also be called "reservation prices." If you use that, you will also have to specify which one you are referring to. For example, "the seller's ...


3

The bid and the ask are the best displayed limit orders. This means non-display orders to buy should not affect the bid, ever. They won't affect the ask unless a transaction occurs. There are four cases, depending on what the order price is. Lower than the bid: There should be no effect on the bid or ask and the order will not execute unless the price ...


3

Sounds to me like you're describing just how it should work. Ask is at 30, Bid is at 20; you offer a new bid at 25. Either: A market maker fulfills your order A new entrant matches your offer Depending on liquidity, one or the other may be more likely. This Investorplace article on the subject describes what you're seeing, and recommends the strategy you'...


3

"Price" is often the last traded price. It's possible in the first example that the last trade was at 149.20 but a sell order at 149.05 came in after that trade. Same (in the other direction) for the second example. A trade was executed at 148.24 but a buy order at 148.94 came in after that trade. Typically these types of discrepancies indicate that an ...


3

Suppose the bid is $10 and the ask is $12. All you have to remember is that the bid/ask spread never works in your favour: when you sell, you'll be paid the lower of these prices ($10, the bid) and when you buy you'll pay the higher one ($12, the ask).


3

On U.S. equity markets, volume size represents round lots. Your quote for VGE is: $53.52 x $53.53 with a volume size of 542 x 134. That means that there are 54,200 x 13,400 shares available at the market. I assume that Canada follows the same convention. If so, that would mean that with VE having a volume size of 1 x 11 then 1,100 shares are ...


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