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Bid/Ask Size Question

post #1 of 11
Thread Starter 
When i'm looking at a basic quote that shows the price, change, bid, ask, bid/ask size, open, and volume.... say the bid/ask size is 34x1. Does this mean that the MM on the Bid is trying to sell more meaning thats a negative sign, or does it mean that there is more support on the Bid side meaning its a positive sign?...or let me know if i'm just completely interpreting both ways wrong. Thanks a lot.
post #2 of 11
If you go to an auction to buy a car, and 3400 people are bidding on an item, is that good or bad?

Big bid = good... assuming you are long on the stock.
post #3 of 11
Thread Starter 
ah yes that makes perfect sense. I'm not sure what i was thinking lol...thanks alot
post #4 of 11
There are not stupid questions here at the HSM university.
post #5 of 11
As an alumni of HSM university, Doodi would have to concur.
post #6 of 11

Bid/Ask Lot Size

I would like to pick this thread up but ask a question from a different slant.

it is apparent to me that there is a critical component to a stock's ability to run, the "lot size" [hopefully i am defining it right]. what i mean is a stock that sells for .12 at lot sizes of 50 (5,000 volume) seem to move a lot faster than those selling for .12 with lot sizes of 5000 (500,000 volume). simple analysis tells me to focus my effort toward stocks selling in the same range with smaller lot sizes.

i would think this would be especially true if the "50 lot" stock is moving an average of 4M volume/day while the "5000 lot" stock is moving an average of 500K volume/day.

prime example is two stocks i am presently in: COPI & SCRA

can anyone advise?
post #7 of 11
For penny stocks, my advice is to basically ignore the lot sizes. They are almost meaningless.
post #8 of 11
Quote:
Originally Posted by simonyadig View Post
For penny stocks, my advice is to basically ignore the lot sizes. They are almost meaningless.
can u support that statement simonyadig. i would really like to understand these processes.
post #9 of 11
Quote:
Originally Posted by thebuffman View Post
can u support that statement simonyadig. i would really like to understand these processes.
Dang it, I was hoping you wouldn't ask that.

In the case of your example (COPI and SCRA), both the 50 and the 5000 represent 5k (minimum) lot sizes. I'm not sure why they do this, but they do. As for why I feel the sizes are useless in the penny world, here is an old post I found explaining why.

Quote:
Originally Posted by simonyadig View Post
Supposedly there is a method to the madness but in my experience the BxA sizes are practically useless in the OTC world (penny stocks). Say all the BxA sizes are 5k. Now that would be the minimum amount you would need to buy/sell to get your bid/ask posted (smaller orders do go through, just not posted on L2s). But that MM on the ask with his size displayed at 5k may have 5 million shares for sale or possibly 5k, you can't tell. I pay very little if any attention to the sizes for penny stocks.

Here is old but still relevant info I found.

The "size of the market" refers to the number of shares that a specialist or market maker is ready to buy or sell. This number is quoted in round lots of 100 shares; i.e., the last two zeros are dropped. The size of the market information is supplied with a quote on professional data systems. For example, if you get a quote of "bid 10, offer 10 1/4, size 10 X 10" this means that the person or company is willing to buy 10 round lots (i.e., 1,000 shares) at 10, or sell you 1,000 shares at 10 1/4.

Specialists report size, they do not create it. It seems that different specialists report the size in approximately three ways:

1. Some are very precise; if a quote is 10x10 and 100 trades the offer, the size then becomes 10x9.
2. Some use what seems to be a convention number. That is if there the size is 50x100 the specialist is reporting at least 5,000 shares bid but less than 10,000, and at least 10,000 shares offered but less than 25,000.
3. Some seem to have no discernable method as the trading seems to be unrelated to the reported size. Thousands of shares trade the bid, the price and size remain the same, for example.

The floor brokers in front of the specialist may be more important than the specialist in this regard; the specialist is not necessarily a party to the trade as is an OTC market-maker; the brokers may or may not put their orders into the specialists' limit order book, or may cancel their orders in the book later. The floor brokers are able to change the size by bidding and offering, and cancelling existing orders, thereby affecting how others trade.

On the NASDAQ, which is not an auction market, size is usually reported as 500 X 500.
post #10 of 11
actually that was VERY helpful. just before i read your post i was doing some screen watching and saw the stock with a total lot size of 100 composed of two ask sizes of 50. with everything up until your post that i've read concerning this, if a bid comes in at 15,000 then this stock should definitely buy up all of the total at the present ask price and uptick the stock. well quite the contrary happened. at least 50,000 of bids at asking price filled my queue and the stock did not uptick. it still sat there at the same price and the same ask with a lot of 50.

your response helped me understand that all i am seeing is a minimum amount being asked, but it could be as huge as the ice under the water of a an iceberg. [well, minus global warming ] anyhow, thanks for that information. now i am eve more inclined to pay steep attention to my technical analysis, hope for good pr to hit the stocks i've selected and pretty much use L2 to guage how many MM's are stacking the buy or sell side of a security.

post #11 of 11
Quote:
Originally Posted by thebuffman View Post
i am eve more inclined to pay steep attention to my technical analysis
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