Multiple bids - consequences?

[Valentino]

Ok today's question:

BID. OFFER
10. 11
9. 10
8. 9


If the board looks like this (And I'm selling) what are the consequences of putting bids on the board at 11,10,9 and then even lower down still like 7?

Would it pressure the stock to ultimately move lower ?


Thanks as always

 

[Valentino]

Re: Multi bids - consequences ?

Additionally
If a stock was opening at $8 and you have a bid lower down at $8.10 would this do anything to the stock like help force it one way or the other ?

 

[Valued]

Re: Multi bids - consequences ?

Ok today's question:

BID. OFFER
10. 11
9. 10
8. 9


If the board looks like this (And I'm selling) what are the consequences of putting bids on the board at 11,10,9 and then even lower down still like 7?

Would it pressure the stock to ultimately move lower ?


Thanks as always

As an individual person you won't have enough money to put in the volume to move the stock in a meaningful way. A lot of trades take place off the books. There are dark pools which you can't see and people buying and selling straight off the bid/offer, especially when spreads are so tight that it's the only way to buy.

Putting in bids won't move a stock lower so I am not 100% sure what you mean there. All it would do is add depth to the buyers. It sounds like you are barking up the wrong tree. You should note too that if you were to put in fake orders (I am not sure if this is what you're suggesting) then it's possibly a crime due to stock market manipulation.

 

[Valentino]

Re: Multi bids - consequences ?

Thanks
By no means any manipulation meant just a hypothetical.
I just wondered if having a bid at say 5 or more spreads higher than where the stock opened would lead it higher or lower (if the size was there from a large institutional bank) ?

For context I'm trying to get a handle on how bids and offers interact and how placing bids and offers on the screen directs a stock.

 

[Valued]

Re: Multi bids - consequences ?

Thanks
By no means any manipulation meant just a hypothetical.
I just wondered if having a bid at say 5 or more spreads higher than where the stock opened would lead it higher or lower (if the size was there from a large institutional bank) ?

For context I'm trying to get a handle on how bids and offers interact and how placing bids and offers on the screen directs a stock.

You need to learn more generally about supply and demand. The DOM (depth of market i.e. the bids/offers) may affect short term supply and demand but at the end of the day* it doesn't matter in regards to overall supply/demand for the session because the DOM is only a snap shot at potential supply and demand for orders at that particular time. It's relevant for intraday trading though.

*That was a clever use of the figurative and literal sense of the phrase "end of day", so much so that I am quite proud of it:

 

[Valentino]

Re: Multi bids - consequences ?

As you should be

 

[peter2]

Re: Multi bids - consequences?

Sorry but you can't have a market depth like your example. The offers should be going higher 11,12,13 not lower.

If someone is happy to sell at 10 then they will hit the bid at 10. Sold and bought. Done.

If someone is happy to sell at 9 then that offer will hit the buy bid at 10 if they get in before the offer to sell at 10. Otherwise they will sell at 9 provide there is enough volume at 9.

I thought that Canoz's beer ladder was a good visual aid.
I would also suggest you watch the market depth when the market is open. Or better still, get your hands on a demo trading platform and place bids and offers and watch what happens to them.

 

[Valentino]

Yes you are correct I meant to type 11.12.13 but didn't. I'm staring at the ladder and am waiting for the lightbulb moment.
As I think of other questions (potentially irrelevant or rediculous to those with experience) then I'm asking.

Many thanks to all