Bid, Ask, and the great secrets to more profits when trading

Bid, Ask, and the great secrets to more profits when trading

Bid, Ask, and size

When you enter an order to buy or sell shares, you will see the offer and demanded action and some numbers. What are the bid and ask, what do those numbers mean? One of them, the offer is what you need to know when you sell shares. On the other hand, ask (or offer) is what you need to know when you're buying. But you also need to know those numbers. Here's how it works:

If an investor looking at the computer screen to offer shares of XYZ, it might look something like this: Last: Bid: Ask 20: 20 1 / 4 BSize: 12 ASize: 5th The translation: the state of XYZ's bid $ 20 a share and offered $ 20 1 / 4 per share. There are 1,200 shares bid for and 500 shares offered. If you are looking to sell shares, now you know that there is a strong willingness to pay (which is offered by the market) $ 20 for your actions, and it can sell at least 1,200 shares of stock at that price. These are two works by offering the stock market: the price and quantity of shares at that price.

If you are looking to buy stock XYZ, you have to pay $ 20.25 and could buy at least 500 shares of stock. Again, there are two parts to ask for the market: the price at which you can buy shares and amount of shares can be bought.

When you look at an offer for the shares, it is only good during which you can check. The bid and ask sizes for each side constantly changing. If you were to check in two minutes and you want to sell your XYZ at $ 20, $ 20 bid may not be there because the shares can be moved up or down in that time frame. So every time you trade, you will need to check the offer and asked to see where your particular stock is trading.

Whenever you enter into online commerce, "live" quote will be displayed so you know where the stock is trading and what to expect if you buy or sell your shares. However, be aware that the stock can move very quickly and could not get the price shown on your screen. It is because of the time your order is sent to the floor to be executed, the bid and asked to be changed because there was an order came in the wake of yours and wiped from the bid or offer. Then the action moves to a new level of supply and ask to be different than what your screen showed when you enter the order. This does not happen very often, but it did not happen. And when investors enter their market orders (which means they will buy or sell shares on the market, regardless of the market where the action is), look at the bid or ask, and then see their execution price is different from the prices stock they saw, they must realize that stocks can be very dynamic, sometimes changing just as their orders are entered.

Another bit of jargon: words requested and offered the same thing. This is the page in a market where investors can buy shares. So when you hear: Where is offered stock? Or what is "asking" the stock market? They are both asking the same thing.

The size of the market can help you decide on the timing of your purchase or the price. For example, if the good old XYZ is trading at $ 20, and bid the stock size is 200 and the offer size is 5, which means there are 20,000 shares on offer and only 500 for sale (when you see the amount of shares bid for or offered, just multiply by 100 for the actual amount of shares. If you see 999, it means that there are at least 100,000 shares). If you are looking to buy the stock, you may want to get your order in quickly because if the purchaser of 20,000 shares gets excited and starts to buy all the stock around, regardless of price, it will increase the price. On the other side of the trade, if you shop, you might want to wait a bit for such a size to buy suggests that maybe the price will move, if the buyer does not have patience and that XYZ wants action now.

Of course, the buyer can range from $ 20 cost, or can find another stock that is attractive to buy instead of one. So you can not know with certainty what will happen to the price of the stock. But then, except death and taxes, security simply is not part of life or investing.