What will Bid Size Mean?
The bid size refers to the quantity of shares of a securities that investors square measure able to shop at a precise price. The bid size shows the amount of shares that investors square measure willing to amass at the simplest obtainable price for many investors that read level one quotations on their mercantilism screens.
TAKEAWAYS vital
The quantity of a securities that investors square measure is able to shop at a precise price is said as bid size.
The bid size is expressed on board several one hundred shares from each one. As a result, a four-bid size equals four hundred shares.
Bid sizes square measure important as a result of they represent a security's demand and liquidity.
Only the bid size for the simplest obtainable price is displayed in Level one quotes. Level a pair of quotes show market depth across several levels of bid costs and bid sizes.
How Bid Size Is Calculated
Bid sizes square measure sometimes depicted on the board in board several one hundred shares from each one. As a result, if level one quote indicates a price of $50 and a bid size of 5, the simplest potential supply from investors wishing to amass the plus is $50 per share for five hundred shares. As a result, AN capitalist UN agency holds that stock may be discarded to five hundred shares for $50 every.
The raise size is that the amount of a precise securities that investors square measure willing to sell at the given raise worth. Bid size is the inverse of raise size. variations in bid and raise sizes square measure seen by investors as showing the provision and demand relationship for that security.
There will typically be several further bid costs obtainable at lesser costs, every with their own bid size, additionally to the simplest obtainable price. Level a pair of market quotes may be wont to access this further information.
Bid Size within the world
For example, within the case of our securities, a bid size of ten (1,000 shares) at a price of $49 is also potential. Therein case, AN capitalist UN agency needs to sell one,500 shares may do therefore for a complete of $74,000 ($25,000 for the primary five hundred shares and $49,000 for the remaining one,000).
In order to get information on bid costs and bid costs below the simplest obtainable bid, level a pair of quotes square measure necessary. In most brokerage accounts, this data is commonly accessible as a premium service.
The goal of this "depth of market" (DOM) information is to supply you with a concept of the magnitude and structure of the security's liquidity. For instance, in our previous situation, when merchandising one,500 shares, the consequent highest price is also considerably lower, say $40.
In this case, AN capitalist merchandising well over one,500 shares would cause the security's market value to plummet. Such AN capitalist might arrange to hold out not simply to induce a much better worth, however conjointly to stay the worth of their remaining shares from falling.
