Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

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".

The bid–ask spread (also known as bid–offer) for securities is the difference between the prices quoted (either by a single market maker or in a limit order book) for an immediate sale (bid) and an immediate purchase (ask). The size of the bid-ask spread in a security is one measure of the liquidity of the market and of the size of the transaction cost.

Source: Wikipedia

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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 "ask") prices at the same time. So how can dealers…
Tim
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What is the final price if the bid price exceeds the ask price in an order driven market?

Let's assume a very simplified situation. There is only one seller asking for 10$ and there is only one buyer bidding 20$. At what price would the transaction go? Some answers say it won't, because the ask price has to match the bid price. (Does a…
Mateusz Grotek
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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)?
huab
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Why do I get a much better price for options with a limit order than the ask price?

When I'm buying an option, I notice that if I set a limit order for in between the ask and bid - say half way, I can often get the option at that price. Why is it that way? I thought the ask price was supposed to be the lowest that anybody was…
user3413723
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How to set a sell limit order that will actually execute?

I'm having trouble getting a good answer to this with Google. I'm also new to this. Haven't actually tried it yet. I have several hundred shares of a security that I'm hoping to sell. Let's say bids are around $34, asks are around $41, last trade…
Mose
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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 to the "market-maker". Who is this…
Kinnard Hockenhull
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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 the bid is related to the best buy order in the…
david.t_92
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How do hidden orders affect bid/ask price?

I am little confused on basic bid-ask concepts. Let's suppose I have a BUY order i.e I want to buy shares. I can either place the order at BID price, lower than BID price or higher than bid price. Now I know, if I place it Display-Higher than…
user2961712
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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. Why didn't my limit order become the highest…
Flux
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Would a market buy order execute at a ridiculous ask price?

I was looking at a Vanguard ETF after the market had closed. The ETF usually trades in the 80 dollar range. I was looking to put in a market order for some shares that would execute the next morning since I wasn’t too concerned about the exact…
JDP
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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 backtest my strategy but i do not know how to handle…
Cleared
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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 automate bid-ask scalping strategy?
Distraction Arrestor
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Why am I unable to buy at the ask price?

I was trying to buy ProShares Short Dow30 ETF (NYSE Arca: DOG). I put in a limit order at the ask price not the bid price since I want the order to execute all at once. The ask price is a penny more than bid price. So if the ask price is 26.11 and…
shwe
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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 you need more info about the bond, please let…
Ron Jab
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Why there are lot of 100 shares packs in Stock Exchanges?

I just checked live Bid/Ask Quotes for XPeng Inc (XPEV) in Nasdaq website and i notice that there are lot of 100 volume trades. Also i chekced other stocks and they also have same trades of 100 volume. Does anyone know why is this…
leonidas efrem
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