Help me figure this out please

[Valentino]

Hello everyone and thank you in advance for any help you can give. I hear many sayings thrown around forums and trading floors/websites but don't understand them. Can you explain what these mean:

1) trader working an order says "I'm gonna walk them up"
2) this stock just went bid
3) additionally how do you tell by looking at the screen that a stock is bid or offered?

If a stock is 10.50 bid and 10.52 offered and I'm buying with a 10.48 limit is it correct that I'd place say 500 shares on the offer at my limit of 10.48 and wait to be lifted ?

Apologies for any poor wording or obvious mistakes I've made

Thanks

 

[Valentino]

Another question:

5) Trader says "I've been in the queue at 5 for the last 20mins and someone came in above me so now I have to pay the next price" - Please explain.

Sorry by way of introduction I should of said who I am. I've been around trading floors off and on for a little while, I work in operations and hear lots of phrases/comments that I don't understand and I don't really have the opportunity to ask so I thought I'd join the forum and ask here in the hope of getting many answers.

Thanks in advance

 

[havaiana]

I'll have a go at this, i'm sure someone will correct me if i'm wrong on one of them

1) trader working an order says "I'm gonna walk them up"
not sure about this one, maybe means if he's bidding he will keep moving his bid up with the inside bid until he gets filled
2) this stock just went bid
when someone buys an offer and leaves a bid where the offer was
3) additionally how do you tell by looking at the screen that a stock is bid or offered?
Bid would refer to being bought/bids and offers moving higher, offered the opposite

If a stock is 10.50 bid and 10.52 offered and I'm buying with a 10.48 limit is it correct that I'd place say 500 shares on the offer at my limit of 10.48 and wait to be lifted ?

nope, you would place 500 on the bid. Bids are below the market offers are above. Bids are buys, offers are sells.
(When trading at market you can lift the offer to buy, or hit the bid to sell

 

[havaiana]

5) Trader says "I've been in the queue at 5 for the last 20mins and someone came in above me so now I have to pay the next price" - Please explain.

he is bidding at 5 and there are no bids in front of him. Then someone put in a bid above his bid at 6, so now to remain the inside bid he would have to joins the bid at 6, bid at 7 (or if there is an offer at 7 maybe he lifts it)

 

[Valentino]

I'll have a go at this, i'm sure someone will correct me if i'm wrong on one of them

Thanks v much havaiana, can you explain - " buys the offer and leaves a bid"

Thanks

 

[havaiana]

Thanks v much havaiana, can you explain - " buys the offer and leaves a bid"

Thanks

say a stock is offered at 9 for 10 shares, 8 for 10 shares, bid at 7 for 10 shares and 6 for 10 shares

so looks like this:

offer 9cents 10shares
offer 8cents 10shares
bid 7cents 10shares
bid 6cents 10shares



I buy place a buy order for 15 shares at 8, so now it 'went bid' and looks like this

offer 9cents 10shares
bid 8cents 5shares
bid 7cents 10shares
bid 6cents 10shares

(i bought the 10 that were on offer and bid 5 more)

 

[Valentino]

Thanks for your patience havi and sorry if this is a poor question but:
If the best offer was $9 for 10 shares how did you manage to buy 10 shares at $8 ?

 

[havaiana]

no problem

I think you still have your bids and offers the wrong way around. The best offer is always the lowest price and the best bid is always the highest price

Don't worry, beer will fix this



offer $9 10 beers (Someone offering to sell 10 beers for $9)
offer $8 10 beers (Someone offering to sell 10 beers for $8)
bid $7 10 beers (someone bidding to buy 10 beers $7)
bid $6 10 beers (someone bidding to buy 10 beers $6)

If you want to buy 10 beers, you would buy from the guy offering them for $8, not $9, why pay an extra $1?

If you had 10 beers to sell (maybe a brand you don't like) why sell them to the guy bidding $6 when you could sell them to the guy bidding $7 and make an extra $1

Or maybe you want to buy 10 beers but think that $8 is too expensive, you only have $7 so you join the bid at $7 and hope someone sells them to you there. But maybe they wont and the price of beer will go up leaving you with your $7 still in hand and no beer.

 

[robusta]

Damn it's true beer does fix everything, fantastic.

 

[Valentino]

haha love that you choose beer..its getting clearer now but...

BID OFFER
10 7 9 10
10 6 8 10


With this as our situation if I am buying as $9 is the top offer isnt this what I have to pay (if I lift the offer). Conversely if I was selling and hit the bid then I'd have sell at $7 as its the best bid.

If I was happy to wait and I was buying then I would join the queue on the offer at $8 and see if I got done. Equally if I was selling and was happy to wait I'd join the bid at $7 and see if I get done.

With this in mind this was how I couldnt see how you were buying the 10 at $8 and then posting 5 more beers at $8 on the bid.

Apologies as I know its me, my logic is twisted somewhere along the way here and has been for a long time if I am honest.

 

[burglar]

... my logic is twisted somewhere along the way here and has been for a long time if I am honest.

One day, you can help someone else with this same problem!

 

[Valentino]

Happily but I need to get it right before I help others, I'm still not quite there yet clearly

 

[Valentino]

Ok am I right in thinking

If you are buying you want to walk a stock down

If you are selling you want to walk a stock up ?

What I've heard makes me think I'm wrong in the above

 

[CanOz]

Hav's beer ladder....visualize it as a ladder.

 

[Valentino]

As 9 is the top price (with volume) in your ladder on the offer side I was always under the impression that this was the price you had to pay. Hence my confusion that he bought 10 at $8 as that's the second price down.
I also don't under stand how by buying 15 takes the 10 that's on the offer and places the other 5 on the bid side ?

Could you explain ?
Many thanks

 

[burglar]

As 9 is the top price (with volume) in your ladder on the offer side I was always under the impression that this was the price you had to pay. Hence my confusion that he bought 10 at $8 as that's the second price down.
I also don't under stand how by buying 15 takes the 10 that's on the offer and places the other 5 on the bid side ?

Could you explain ?
Many thanks

It will come to you.

Think beers. You ask for 15 beers.
The Buxom Bavarian Barmaid brings you 10.

You are waiting in the cue for the 5 more beers.

She is seller, ...

You are buyer.

 

[CanOz]

As 9 is the top price (with volume) in your ladder on the offer side I was always under the impression that this was the price you had to pay. Hence my confusion that he bought 10 at $8 as that's the second price down.
I also don't under stand how by buying 15 takes the 10 that's on the offer and places the other 5 on the bid side ?

Could you explain ?
Many thanks

It all depends on how much you want to pay, if you only want to pay 8 but have 15 to buy, there are only 10 on offer for 8, so you either put a bid in at 7, or pay 9 for 5 more. You swept the offer at 8 so unless someone offers some more there are no more to buy that that price. You could put a bid in at 8, but that bid may not show as 7 is the current bid.

 

[Valentino]

Thanks guys, I sense I'm close to that lightbulb moment.

Ok another question:
Just say there are 500 shares on the bid at 10 and 200 shares on the offer at 11

BID OFFER
500 10 11 200

Does this signify anything ? Does it mean that the stock is better bid and likey to move higher ?

Again, many thanks

 

[burglar]

... Does this signify anything ? ...

So many factors to consider.

 

[CanOz]

Thanks guys, I sense I'm close to that lightbulb moment.

Ok another question:
Just say there are 500 shares on the bid at 10 and 200 shares on the offer at 11

BID OFFER
500 10 11 200

Does this signify anything ? Does it mean that the stock is better bid and likey to move higher ?

Again, many thanks

It might, it might not. What if you see a 1000 lot hit the bid at 10 and that 500 doesn't even blink, its still there...OR a 100 lot hits the bid and drops it immediately! .... ? Now you have some useful bits of information....repeat that a few times and you can start to form a picture of whats going on in the depth...