# Market Depth questions



## gregcourageous (30 April 2007)

Hello All. 

Quick question, I know market depth shows you who is buying and selling, but what does the "number" mean... eg in commsec, on each side is the quantity, then to the outer side it has "number"

I'm a massive newbie to trading, just trying to get my head around as much as possible as quick as possible =) This forum seems to be a good place to do it, appreciate all the posts from everyone who knows what they are doing - keep em coming!

Cheers.


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## svensk (30 April 2007)

*Re: Market Depth question*

The number means how many people selling at that price.

So say 

Price - 0.50
Quantity - 50000
Number - 5

Five people selling/buying at 0.5, totaling a quantity of 50000 shares.


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## gregcourageous (30 April 2007)

*Re: Market Depth question*

Thanks - I thought that may be the case, however i thought the number would be bigger than they are. 
Appreciate your help!


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## Tech_king (30 April 2007)

*Re: Market Depth question*

The number can be bigger sometimes! Just depends on the day and if anything is happening with the stock.


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## falconx (30 April 2007)

*Re: Market Depth question*

Is there anywhere you can view the delayed or live market depth for free? For some reason NAB online trading don't offer it.


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## svensk (30 April 2007)

*Re: Market Depth question*



falconx said:


> Is there anywhere you can view the delayed or live market depth for free? For some reason NAB online trading don't offer it.




etrade and commsec show live market depth, but only for the top ten sell and buy orders and last ten trades.

I think the pro platforms for both of the above show full market depth.


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## falconx (13 May 2007)

*Re: Market Depth question*



svensk said:


> etrade and commsec show live market depth, but only for the top ten sell and buy orders and last ten trades.
> 
> I think the pro platforms for both of the above show full market depth.




I am interested in viewing the market depth of all stocks in the ASX300, where would be the least expensive website for it?


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## Cyber Man (17 May 2007)

*Market depth question?*

I have traded for many years now and there is one thing that I have wondered about so I was hoping that someone here can shed some light?

Say for instance a stock has the following bid/ask -

LOTS/BID         LOTS/ASK
9044   655          2301   656
8455   654          1881   657
etc.

You watch the usual trades go by and then suddenly you see a trade of 100000 go through with very little change to the bid ask and no change to the last price. Where does this trade come from and why doesn't it show in the depth? Is it a pre-arranged sale between two parties? This question may sound stupid but it is something I have thought about for a while.


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## reece55 (17 May 2007)

*Re: Market depth question?*

The answer is crossed trades, which happen when ASX participants manage both the sale and the purchase in the one go..... Hence, they are offset against one another.

Ever looked at full market depth - watch for the buyers and sellers of 1 share - these enable the brokers to perform the crosses.

Cheers


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## Cyber Man (17 May 2007)

*Re: Market depth question?*

Thanks for the reply Reece. I thought crossed trading was illegal?


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## AnalysisParalysis (17 May 2007)

*Re: Market depth question?*

Thanks Reece, I was wondering why someone would sell 1 share.


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## Spaghetti (17 May 2007)

*Re: Market depth question?*

Market depth leaves me with many questions and causes me to scratch my head.

For eg I see a sell for $3.00 and a buy for $2.85. Big gap. Why would you want to have a buy order so far from a sell order? You watch the stand off for ages then if a seller breaks and sell for $2.85 the prices heads south quickly triggering all sorts of stop losses, so the person who eventually bought for $2.85 makes an instant loss. Asked for it.

Then the other side of the coin, if you want to sell and there is a gap of 15c why not even try to place a sell order in between instead of going to the highest bidder. Even try it for 5 minutes. 

Anyways back to scratching my head.


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## Bullion (18 May 2007)

*Re: Market depth question?*

Everyone has their own way of trading and their own theories of what is the best way to go about it. Someone might want a quick sale, another can wait to get a better price.

All comes down to the mind of the seller/buyer


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## Broadside (18 May 2007)

*Re: Market depth question?*



Cyber Man said:


> Thanks for the reply Reece. I thought crossed trading was illegal?




cross trades are quite legal and brokers love them as they earn commission on both sides of the transaction, there are market rules to obey though.


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## ronski456 (26 March 2008)

*Market Depth - A Question*

First time poster here...

I have been following ALT recently and yesterday it closed @ 0.017.

This morning it had a market depth volume of 5,267,000 units and 18 buyers; volume of 3,013,000 and 13 sellers.

Why is the indicative price then 0.015 for the opening?

I thought buyers > sellers = price goes up or at least stay the same as previous close?

Cheers


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## Trembling Hand (26 March 2008)

*Re: Market Depth - A Question*

No it all depends at what price the buyers are at.

If you had 10000000000000 buyers and 3 sellers still mean nothing if the highest buyer was only at .010 cents


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## reece55 (26 March 2008)

*Re: Market Depth - A Question*



Trembling Hand said:


> No it all depends at what price the buyers are at.
> 
> If you had 10000000000000 buyers and 3 sellers still mean nothing if the highest buyer was only at .010 cents




TH is right here and believe me, if you regularly watch L2 screens, the brokers are prone to putting in these dummy bids low to boost the number of buyers in times of a sell off......... I normally look at 5 - 10% either side (depending on the volatility of the stock) as an indication of the actual buying and selling power, but even then you don't know because a lot of players don't show their hand...... If you are buying or selling a large parcel, your not going to announce it in the L2 are you!

Cheers


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## RamonR (25 June 2008)

*Market Depth question*

Have recently aquired CBA and it seems to be trading around $40 a share on average.
But some days you see some buy orders which seem to be ridiculously above market value i.e. $54 per share.

I cannot understand this but wonder if this gives them preference.
So that they are the first trades executed at market prices.

Is this a strategy for getting in first or is there more to it that.


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## prawn_86 (25 June 2008)

*Re: Market Depth question*

This questions gets asked many times over. In fact as recently as this morning. Have a search through the beginners lounge from this mornings posts


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## mfp (25 June 2008)

*Re: Market Depth question*



RamonR said:


> I cannot understand this but wonder if this gives them preference.
> So that they are the first trades executed at market prices.




You are spot on. This will occur during the opening/closing auction where people are simply jumping the queue to ensure their buy order is filled at the opening/closing price.


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## Timmy (25 June 2008)

*Re: Market Depth question*

This document should help.


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## RamonR (25 June 2008)

*Re: Market Depth question*

Revelant parts from the above posted link


*How orders are queued for trading - There are strict regulations governing order priorities. Orders are queued and traded according to price-time priorities. Better-priced orders trade first. If there is more than one order at the same price, the order that was placed first has priority, except in the case of crossings. *


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## johnymm (8 April 2010)

*Question about market depth*

I want to be sure that i'm getting the market depth, correctly:

If there is a stock/futures with the following market depth:

bid: $8
ask: $10.
bid orders volume: 1
ask orders volume: 1

Can I buy this 1 ask order and then sell to this 1 bid order?
Of course I will lose $2 from the spread...

Also: What's the chance that when I buy the 1 ask order - then my buying won't increase the spread even futher? It should be always that when there are many buyers - price goes up...but what guarantees that the "bid part" of the spread won't go down?

10x alot in advance.


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## Trembling Hand (8 April 2010)

*Re: Question about market depth*



johnymm said:


> Can I buy this 1 ask order and then sell to this 1 bid order?
> Of course I will lose $2 from the spread...



Correct



johnymm said:


> What's the chance that when I buy the 1 ask order - then my buying won't increase the spread even further?



 Correct the spread will increase out to the next ask.



johnymm said:


> It should be always that when there are many buyers - price goes up...



 Not always. Especially if you are talking about "buyers" as the orders sitting in the Depth. They are not actually buyers they are bidders. There is a difference.



johnymm said:


> but what guarantees that the "bid part" of the spread won't go down?



 Nothing.


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## joea (8 November 2011)

Hi.
My question is... If a share was trading at around 35.5 cents why would someone place a order for 20 million at 1 cent.
So the buys are about 21,600,000 with the sell side about 1,600,000.?

I do not know how often this type of thing happens, but I confirmed this approx.value with a broker and Comsec because the bottom level is not visible unless you have a platform.

joea


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## investorpaul (8 November 2011)

joea said:


> Hi.
> My question is... If a share was trading at around 35.5 cents why would someone place a order for 20 million at 1 cent.
> So the buys are about 21,600,000 with the sell side about 1,600,000.?
> 
> ...




Hi Joea,

They do it to make it look like there is a lot of buyers.

If one was to casually look at the total buy depth they would see the 21,600,000.

However, if they had dug down and looked at the individual orders they would see the 20 m order as a "fake".

They hope that the uneducated will get caught up in the "hype" and think that there is a lot of buyers and they better jump on the stock while they can.

If enough people do this the price is pushed higher or at least supported at its current level. 

The person with the fake buy order (20m) may then actually be selling into these new bids as they come onto the market.


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## joea (8 November 2011)

investorpaul said:


> Hi Joea,
> 
> They do it to make it look like there is a lot of buyers.
> 
> ...




Thanks Paul.
Will send you PM.
joea


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