Read the bid and ask prices
To read the stock price correctly, see the figure, Which illustrates the
concept of bid and offer from the investor’s point of view, as we see here
that the price at which the investor can buy shares is $45 (offer price). The price at which he can sell is $44.75 (bid price).
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From an investor's point of view, a certain quantity can be bought and
sold at a certain price.
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Figure -1 shows how the bid and offer lists work.
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On the left side we see a queue of orders Buying, we call it the bid
side (i.e. the order to buy the stock).
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On the right side we see a list of sell orders, We call it the offer
side (i.e. offering the stock for sale). A purchase order consists of
a certain price and a certain quantity
So the highest price is placed at the top of the list, and it is called
the best order. A sell order consists of a specific price and a certain
quantity, so that the lowest price is placed at the top of the list, and
it is called the best offer.
Note: that the current situation indicates that there are
those who would like to buy 200 shares at a price of $12.74, and there are
those who.
He would like to sell 700 Stock at a price of $12.77, so we say that the
spread is between the best ask and the best the offer is equal to 3 cents
in this case. Thus, there is currently no agreement on the price, and none
will occur Trade until a new order comes in to buy at $12.77 or another
order to sell at $12.74.When we talk about the nature and types of buy and
sell orders, we see that the order is at a price market means buying or
selling the stock at the price available in the list, and the limit order
is the order that it enters the list and competes with the rest of the
commands.
For example,
if a buy order for a number came to the market 700 Stock at the market
price, the order will be executed at a price of $12.77, even if there is
a sell order at a price if the market has 200 stock, these stocks will
be sold at a price of $12.74.
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In this figure: Whoever wants to buy goes to the bid row, and
whoever wants to sell goes to the ask row. Here we find the
purchase price at the market price of $12.77, and the selling
price at the market price of $12.74.
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All of these orders are price-conditional, but not quantity-conditional,
meaning that the one who wishes to buy or sell does not stipulate a
specific quantity without which the sale or purchase cannot be completed.
Rather, a person may request to buy 1000 Stocks at a price of 12.77, only
700 of them can be obtained.
If the person requested to buy 1,000 stocks at a price of 12.78 and
stipulated whether to buy the full quantity or not to buy, no part of the
order would be executed, in this example, even though there are those who
would like to sell at a lower price ($12.77), but in an insufficient
quantity. For this matter.
The concept of Ask (offer) and bid
When looking at the price of any commodity, whether stock or otherwise, we
find in return for each price there is a certain quantity of the commodity
that can be sold at that price (the amount offered). And if it's the
price...
A relatively high volume is expected to increase. And in exchange for that
price, there's a certain amount that can be bought at that price, which
increases if the price is relatively low. And the price of balance is that
price by which you can do the biggest amount of sales and purchases, and
that's what you want to do.
The concept is what is known as economics as the theory of offer and bid,
which applies to all types of goods and services in the capital economy,
including equity prices. But it's possible anytime.
The price of the commodity must be higher or lower than the price of the
balance, but that does not last long, as the price must return to the price
of the balance.
The concept of ask and bid can be applied to equity prices by examining how
the stock price is fixed in markets that use the open appeal method, or as
always occurs before the market is opened in all markets. The following is a
study of offer and bid before the opening.
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Offer and bid trading strategy
We find above that the bid curve draws the amount of stock required to be
purchased by customers, and we find it leaning down because the amount
required is lower at high prices and higher at low prices (normally, there are
people who want to buy large amounts of stock at low prices, and there are no
people who want to buy their stock at high prices).
The offer is marked by the amount of shares offered for sale by the processors
and, as a general matter, by the fact that the supply increases at high prices
and decreases at low prices. Once again, it is natural that there is a
willingness to sell large quantities of shares at a high price, and that there
is no one who wants to sell many shares at a low price.
Example:
we believe that 14,000 stock are required for purchase at a price of $12,
corresponding to 26,000 offered for sale at the same price, which means that
this price is not a balance price, or that it is not a fair price. We also find
that 30,000 stocks at a price of $10, compared to only 10,000, are offered for
sale at that price. Once again, this price is not considered to be a balancing
price. The New York market specialist, or the computer in
[NASDAQ ], is looking for the best price, which in this case he finds at $11, where the
quantity requested and the quantity offered are equal or close. So the market
opens for this arrow at $11, and the maximum amount is implemented at this
price.
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