# Ask and Bid lots



## Westerly (Dec 26, 2010)

Hopefully this is as intuitive as it looks. When TD lists "ask / lots" I presume the lots is the # of buyers? If so, do you consider this in your decision to buy/sell (as opposed to waiting it out, perhaps until later?) Would a high # of buyers relative to sellers indicate that the price could rise? (simple supply and demand?) 

Thanks


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## humble_pie (Jun 7, 2009)

re sizing details - sometimes called the B/As - the "ask lots" mean the number of lots that are being offered for sale at the indicated price.

the detail has nothing to do with the number of actual sellers (note: ask means offered for sale, not bid to buy) 
there could be one seller offering 400 lots of shares (that's 40,000 shares)
or there could be 400 sellers offering one lot each (that's also 40,000 shares)

the number of buyers & sellers is included in level II quotes

do i consider this information?
of course, especially with thinly-traded stocks & options
sizing in the B/As is just one of many indicators one should keep an eye on.

what we don't see in the exchange-published B/As is the activity going on in dark rooms

sometimes it can happen that buyers cluster on the buy side, or sellers cluster on the sell side, but meanwhile the wretched stock keeps running in the opposite direction. This i usually assume is due to dark room trading.


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## GoldStone (Mar 6, 2011)

Westerly said:


> Would a high # of buyers relative to sellers indicate that the price could rise? (simple supply and demand?)


You can't tell anything by looking at the simple bid and ask (Level I). You need to see the depth of the order book (Level II).

Level II shows all public orders. The buyers who bid below the current bid. The sellers who ask above the current ask. But even that doesn't tell you much. A large order can go through at any moment without notice.


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## humble_pie (Jun 7, 2009)

actually i rarely look at level IIs although i do have various kinds of streamers.

you can tell a lot by watching level I info, if you learn to read it.

i have a strong visual memory so all the little factoidlets become a living tapestry.


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## GoldStone (Mar 6, 2011)

Ummm, sorry, let's agree to disagree as per our usual. 

Level II is indispensable when you deal with low volume small caps. I'm not a psychic to see what's behind Level I.


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## humble_pie (Jun 7, 2009)

definitely *not* indispensable. Most options are low volume small caps. There are no level II options quotes, at least none that are sub-professionally priced.

me i'm happy as a lamb in clover with this. It's my home town, i trade here every day, i don't need a road map, i'm not psychic. 

neighbour across the way waves a price at me, i pretty much know if he's serious or not. or whether i can get him to budge. or not.


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## Rusty O'Toole (Feb 1, 2012)

Westerly said:


> Hopefully this is as intuitive as it looks. When TD lists "ask / lots" I presume the lots is the # of buyers? If so, do you consider this in your decision to buy/sell (as opposed to waiting it out, perhaps until later?) Would a high # of buyers relative to sellers indicate that the price could rise? (simple supply and demand?)
> 
> Thanks


1 lot = 100 shares. Also known as a "round lot". Less than 100 shares = an "odd lot".

"bid" means there are potential buyers bidding that much money for that many lots. "ask" means there are sellers asking that much money for that many lots.

The information could be of value if you are interested in thinly traded, low priced stocks sometimes known as "penny stocks". They can be hard to buy and sell in size or when the market is jittery. 

A better answer would be, to stick to popular stocks that trade 200,000 shares a day or more and are listed on a reputable exchange. You will be able to get a fill on any order you are likely to place, without moving the price.


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## GoldStone (Mar 6, 2011)

humble_pie said:


> definitely *not* indispensable. Most options are low volume small caps. There are no level II options quotes, at least none that are sub-professionally priced.


Low volume small caps vs. options are two different games altogether.

Options: wide spread is the usual problem. You bid within the spread to see if the other side budges.

Low volume small caps: spread is rarely a problem. It can be as narrow as 1c. Lack of size is the problem. If you want to sell 1000 shares reasonably quickly, while the bid is 100, you are helpless without Level II.

You are smart and I am right. Think about it and you will agree with me.


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## humble_pie (Jun 7, 2009)

i am a dumb crumb & you may be right in parts. Except this:



GoldStone said:


> Low volume small caps: spread is rarely a problem. It can be as narrow as 1c. Lack of size is the problem. If you want to sell 1000 shares reasonably quickly, while the bid is 100, you are helpless without Level II


spread is always a problem with low vol small caps. The spreads are always big for lvsc. Unheard of is the lvsc with 100 shares bid at say 7.76 while seller is offering 1000 shares at 7.77, only a penny more. Life doesn't happen like this.

one side or the other is going to cave PDQ or else leave. This development will uncover the next level. 

suppose our bidder leaves. Tant mieux, he looked like a flake anyhow. That wasn't even a normal spread.

now all of a sudden we're seeing a typical spread. Here are say 500 shares bid at 7.68 while our seller still fiddles at 7.77.

if we are the seller, what will we do? like goldstone, we could trudge on over to level II but wait! while we're trudging some fiend zips from behind & rapidly sells 500 shares to our bidder, who obligingly rises from 7.68 to 7.70!

now that he's gone, we see to our horror that the bid falls again, to 7.62 with only a feeble size of 400! oh god what are we supposed to do now? (wrings hands)

but even as we trudge & tippytoe & dither over our precious level II quotes, some new demon erupts from behind & sells 2000 shares at 7.65! now the bid falls again, this time to 7.56!! hay soos kreest!!! we izz lost#?&%!!

that's why i say pay strict attention to the primary data stream & don't rely on the level IIs. They're nice, but they're not "indispensable."


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## GoldStone (Mar 6, 2011)

I am sorry but I can't comprehend the scenario. Not at 10:46pm. 

OTOH, I can comprehend Level II at any time of the day or night.


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## Westerly (Dec 26, 2010)

So...,not simple supply and demand I'll have to re-read your responses about 10 times and then do some research. Thanks to all.


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## humble_pie (Jun 7, 2009)

it's my accent?


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## sags (May 15, 2010)

It's your vast knowledge of the topic........combined with my ignorance of it..........that mystifies me.

Sometimes I get the drift and sometimes not. I am thinking options wouldn't be for me.

I do have a general question about "lots" though......particularly odd lots.

If I was to buy say.........Berkshire Hathaway B shares with a sizeable amount of money............the 100 share lots wouldn't be a problem.

But if I was determined to continue to buy the shares.......say at a pace of $1,000 per month..........I could only buy 8 or so shares.

Am I therefore stuck building the cash until I could buy 100 shares? I wouldn't think odd lots of 8 shares comes around that often.


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## humble_pie (Jun 7, 2009)

salut sags, i almost never do odd lots, only rarely in a registered account because purchases there have to be paid with cash. My rare odd lots have all been canadian securities. So i really don't have much experience.

however odd lot traders are faring much better nowadays than in the past. Previously odd lot orders had to be routed to odd lot dealers, who charged a premium. But now automated order execution in liquid stocks like berkshire B streams odd lot orders in with regular orders.

what i've noticed in canada is that the lot-size part of an order will be filled first, then the remaining odd lot portion will hang around unfilled for a few minutes or sometimes even as long as an hour or two. IE with an order for 550 shares, typically the 500 will go lickety split but it will take a while longer to do the remaining odd lot of 50.

there are detailed rules governing odd lot trading at each exchange. For berkshire B, this would be a US exchange. It won't be necessary for a seller to come along with a specific order to sell the 8 shares you might be interested in buying. Automated order execution will pick off your 8 shares as the sell orders stream along.

might i mention one caution? i'd make absolutely certain to place a limit order, especially with an odd lot. Berkshire B was, a few minutes ago, bid 113.69, ask 113.70. This is a very tight spread indeed (which is good for you.)

i'd place my limit buy order a penny or even 2 pennies above the offer (the ask), because i'd be wanting to get the job done & i wouldn't want to waste time fiddling around with 8 shares.

one tiny further caution? after placing the order, watch order & quote details very closely. If the price swings up but your order is not filled, be prepared to raise your buy limit if necessary, always keeping it a penny or 2 above the ask.

of course, if the price swings down, you could always rejig your buy limit price downwards ... however by that time you'd probably be filled already!

best wishes for your venture.


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## jacofan (Apr 17, 2013)

GoldStone said:


> You can't tell anything by looking at the simple bid and ask (Level I). You need to see the depth of the order book (Level II).
> 
> Level II shows all public orders. The buyers who bid below the current bid. The sellers who ask above the current ask. But even that doesn't tell you much. A large order can go through at any moment without notice.



+1 - Level 2 is the way to see the depth of buys & sells. Wish TD offered it free like other do.


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## jacofan (Apr 17, 2013)

sags said:


> I do have a general question about "lots" though......particularly odd lots.
> 
> If I was to buy say.........Berkshire Hathaway B shares with a sizeable amount of money............the 100 share lots wouldn't be a problem.
> 
> ...


Odd lots are easy to buy/sell. The buy or sell price just has to drive through your limit (always use a limit price!) and you will get filled on your odd lot. As long as its a liquid stock, no problem. Just remember to set a limit price....and then wait. You can have the order run for a few days if you want to even.


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## sags (May 15, 2010)

Thanks for the advice Humble and Jocofan...........will be prepared to do just what you suggest.


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## jacofan (Apr 17, 2013)

odd lots generally get filled on market orders - quite a few times I've been left with odd lots when I had limit sells in. It sucked - a little - to pay the same commission to sell 24 shares as I did to sell the other 2976 shares (when my limit sell order didn't get filled completely) but in the big picture, $10 commission isn't a whole lot as generally my trade total value is never less than $10k


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## humble_pie (Jun 7, 2009)

this is precisely why investor should stickhandle his order closely, as mentioned.

sags i suggested you might consider placing buy limit order a penny or 2 above existing ask price. This gives yourself a little wiggle room. Be prepared to promptly adjust order upwards if the bids/asks/last prices begin to tweak upwards.

the broker is obligated to get you the best available price, so if prices are streaming a penny or 2 below your limit, you will get filled at such lower price.

my suggestion is tailor-made for a situation where a) only 8 shares are involved, ie the entire grand sum of 8 pennies is at stake; & 2) the bid/ask is only one penny apart.


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## Rusty O'Toole (Feb 1, 2012)

As others have said, odd lots don't mean very much these days compared to the days before electronic trading. In those times you paid a large commission plus an extra commission for an odd lot, making it considerably more expensive than trading round lots.

Today the difference in cost is little or nothing if you trade online. You could ask your broker if there is an extra fee for odd lots but I don't think there is.


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## jacofan (Apr 17, 2013)

forgot to add that you usually have an option to check a box "all or none" when you buy or sell, that can cause your order not to get filled if there wasn't a buyer/seller for the complete amount. I never use that option, the reason that I sometimes only get partial fills (I'd rather take my chance then risk not getting filled) - but not too often. 

With a liquid stock there's probably not a problem 99.9% of the time filling the order. A couple of my holding have ave. daily trading volume of ~100k shares so I can run into liquidity problems if I had to panic sell.


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## Rusty O'Toole (Feb 1, 2012)

sags said:


> It's your vast knowledge of the topic........combined with my ignorance of it..........that mystifies me.
> 
> Sometimes I get the drift and sometimes not. I am thinking options wouldn't be for me.
> 
> ...


Some companies have investment plans that allow you to buy small numbers of shares on a monthly payment plan once you are a shareholder. There are even people who will sell you 1 share so you can set up a plan commission free.

There are ETFs and Funds that your broker will sell you commission free. They might make a good vehicle for a monthly saving and investing plan.


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## Xoron (Jun 22, 2010)

RE: lots and odd lots.

The lot size also depends on the stock price. 

*Canadian Markets*

*Price**Board Lot
*Under 10 cents1000 shares10 cents to under $1.00500 shares$1.00 and over100 shares

*U.S. Markets*

*Price* *Board Lot*All Stocks100 shares



Source:
https://www.tdwaterhouse.ca/webbroker/help/stockquotes.htm


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