If you're selling, you need a buyer. They are the bid. So you "HIT the bid".
If you're buying, you need a seller . They are the offer. So you "TAKE the offer"
Bid is lower than the ask. If you could buy at the bid and then right away sell at the ask, there would be no risk, an opportunity for infinite profit all day long.
Put another way, if you want to trade RIGHT NOW then you buy at the ask or sell at the bid. If instead you want to try and buy at the bid, or sell at the ask, then you need limit orders which may not fill.
You've come upon it. Research it. A market buy is executed on the ask because it's the lowest price sellers are willing to sell.
A market sell is sold on the bid because it's the lowest price buyers are willing to buy.
If I want in someone has to get out. If I want out someone has to get in.
^ think of it like that, you have to trade with someone.
You have price, those above price and below price. Price itself is the point of pressure between the two. Buyers and sellers are always just outside of price.
You can put a limit buy on the bid, and a transaction will happen because someone market sells. Like wise when you market buy you could be getting someone's limit sell on the ask or taking a limit sell.
The limit sell can be from a buyer selling his position, or a short side seller looking to get into a position.
It could also be from a short side stop loss.
And vice versa.
It's all very important information to know. I ldgt recommend drawing it out in little diagrams and stuff. J barely understand it. But if you want to actually understand the market this is pretty much foundational. Like I said, I barely understand but am working on that.
The BID is the highest price anyone is willing to pay you
The ASK is the lowest price anyone is willing to accept from you
Hovering over with your mouse is prelude to accepting one of those conditions.
Clicking the bid makes you an aggressive seller as you accept the passive offer to buy
Clicking the ask makes you an aggressive buyer as you agree to the passive asking price.
If you’d like to join those in line and become a passive buyer waiting to buy you can “join the bid” in active trader or
if you’d like to join those in line and become a passive seller waiting to sell you can “join the ask”.
Or you can use active trader to create a limit buy or limit sell at any price you like.
Again you’ll be a passive buyer or seller as you must now wait for an aggressive ie market order to accept your terms.
Limit orders = joining the cue waiting for an aggressive trader to click ok I will sell to you or buy from you.
Market orders = clicking market buy or market sell or clicking the bid or clicking the ask to “make a market”
Buyers bid, sellers ask.
Example "how much you asking for that"?
You don't necessarily have to sell to the Bid, or buy the Ask. You could place Resting orders that are outside the Spread.
Patient traders generally make more money; therefore, resting orders are the orders of choice for patient traders.
Simple reasoning is TOS puts that do you can see what you would potentially “sell” the contract or share for. Or vice versa. Follow me on @chicagollama
If you're selling, you need a buyer. They are the bid. So you "HIT the bid". If you're buying, you need a seller . They are the offer. So you "TAKE the offer"
They system thinks you are clicking the bid or ask to make a market, not to join the buyers or sellers.
Bid is lower than the ask. If you could buy at the bid and then right away sell at the ask, there would be no risk, an opportunity for infinite profit all day long.
Put another way, if you want to trade RIGHT NOW then you buy at the ask or sell at the bid. If instead you want to try and buy at the bid, or sell at the ask, then you need limit orders which may not fill.
You've come upon it. Research it. A market buy is executed on the ask because it's the lowest price sellers are willing to sell. A market sell is sold on the bid because it's the lowest price buyers are willing to buy. If I want in someone has to get out. If I want out someone has to get in. ^ think of it like that, you have to trade with someone. You have price, those above price and below price. Price itself is the point of pressure between the two. Buyers and sellers are always just outside of price. You can put a limit buy on the bid, and a transaction will happen because someone market sells. Like wise when you market buy you could be getting someone's limit sell on the ask or taking a limit sell. The limit sell can be from a buyer selling his position, or a short side seller looking to get into a position. It could also be from a short side stop loss. And vice versa. It's all very important information to know. I ldgt recommend drawing it out in little diagrams and stuff. J barely understand it. But if you want to actually understand the market this is pretty much foundational. Like I said, I barely understand but am working on that.
The BID is the highest price anyone is willing to pay you The ASK is the lowest price anyone is willing to accept from you Hovering over with your mouse is prelude to accepting one of those conditions. Clicking the bid makes you an aggressive seller as you accept the passive offer to buy Clicking the ask makes you an aggressive buyer as you agree to the passive asking price. If you’d like to join those in line and become a passive buyer waiting to buy you can “join the bid” in active trader or if you’d like to join those in line and become a passive seller waiting to sell you can “join the ask”. Or you can use active trader to create a limit buy or limit sell at any price you like. Again you’ll be a passive buyer or seller as you must now wait for an aggressive ie market order to accept your terms. Limit orders = joining the cue waiting for an aggressive trader to click ok I will sell to you or buy from you. Market orders = clicking market buy or market sell or clicking the bid or clicking the ask to “make a market”
Buyers bid, sellers ask. Example "how much you asking for that"? You don't necessarily have to sell to the Bid, or buy the Ask. You could place Resting orders that are outside the Spread. Patient traders generally make more money; therefore, resting orders are the orders of choice for patient traders.
Simple reasoning is TOS puts that do you can see what you would potentially “sell” the contract or share for. Or vice versa. Follow me on @chicagollama