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Full Version: Bid size, ask size - ANY significance or
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calmcookie
I realize that volume is important, but curious as to WHY brokers give a running commentary on "bid size" and "ask size." There seems to be absolutely no pattern to the fluctuations related to price ... or any other factor worth considering. I'm only concentrating on 3 stocks at the moment, but still see no reason for knowing bid size or ask size. Other experiences?

Thanks, C.C. smile.gif
traderpaul
Bid and ask shows very short term demand for the stock. Let say you have a buyer (bid) for 100 shares at $25 and 50 sellers (ask) for 50,000 shares at $25.02, I would wait for a while before I buy.....
EagleTrader
QUOTE (calmcookie @ Mar 14 2005, 11:21 PM)
I realize that volume is important, but curious as to WHY brokers give a running commentary on "bid size" and "ask size." There seems to be absolutely no pattern to the fluctuations related to price ... or any other factor worth considering.  I'm only concentrating on 3 stocks at the moment, but still see no reason for knowing bid size or ask size.  Other experiences?

Thanks,  C.C.  smile.gif
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Hi C.C.

This is called level 2 trading. There are day trading systems designed to smoke out sudden increase in buying or selling pressure on any security by analysisng the top few bid and offer sizes and then jumping ahead of the big order. Now, often the big buy order spooks the market by initially showing a large offer, cancelling it and clearing out the selling day traders. Be careful with these methodologies, you will see plenty of fake out moves.
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