Bid size vs ask size?

Question

Does the ask size become the opening price of the stock when the market opens or how does it work? Or measures the buying n selling pressure or what's the meaning of the ask n the bid price? Thank you all

Answer 1

The bid/ask of a stock in pre market has to do with the orders that are placed before the markets open. So if a MM has a large number of buy orders, the ask will be moved up-as long as someone is willing to pay that price. Once the buyers are not willing to buy at those levels-the MM will start to move price down.



A big part of where a stock price opens-has to do with how they traded overseas. If +1% overseas-good chance it will open +1% in the US markets. Following what happens after the markets open is more important than where it opens. If buyers continue to rush into stock/index/futures, most likely be a trend higher day.



Following what the institutions are doing is a must. I day trades ETF's and follow the Mel system. They are have a great trading room and I have made a lot of money follow the system. Below is a video describing the system. Very easy. Hope this helps.



http://www.thefinancialinc.com/freepresentation/landing.html

Answer 2

The bid is what you sell to and the ask is what you buy from.

If you are placing an order onto the order book then a sale will go on the ask and a buy will go on the bid.

Sometimes called bid/offer which makes a bit more sense(?)

Size is irrelevent.

Opening and closing is a bit of a misnomer these days.

Take the FTSE market. It closes at 4.30 and then goes into a closing auction for 5 minutes (less 1-10 seconds, I think) and then all the trades that can be matched on the order booked are matched, or traded in what's called an un-crossing price (U/C).

In the morning there is an auction, again, for 5 mins before the open (9.00). Of course trading can be done out of hours if you can find a Market Maker.

The size may take time to build up in not so liquid stocks. For example you may have very low size in the bid & ask which makes a mockery of the share price.

Answer 3

Here is a pen, I want to sell it for $10 but you only offer $9. The ask price is $10, the bid price is $9. Which one is the open price? Not any price until the transaction is consummated. Some body may be willing to pay $9.59, $9.75 etc. It really depends if transaction is done.