buy the bid and sell the offer

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Old Sep 25, 2005, 12:27pm   #1
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buy the bid and sell the offer

What does this mean exactly:

buy the bid and sell the offer
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Old Sep 25, 2005, 12:46pm   #2
 
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Exactly what it says on the tin.

Say the YM future was quoted as 10100 bid and 10101 offer toy could put a limit order in to buy at 10100. Generally you would get a fill at 10100.

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Old Sep 25, 2005, 1:32pm   #3
 
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Assuming there are sufficient sellers at 10100.
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Old Sep 25, 2005, 6:22pm   #4
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Quote:
Originally Posted by Anonymous
Assuming there are sufficient sellers at 10100.
I have traded the YM by buying the bid to go long, just to cover commission. and it dont have to trade through the bid to get a fill. You just in a quew,and sometime you get filled other times you dont, But if it trades through the bid you 100% get filled

Anyway the question to you Volume fans. If you buy at the BID does it show up on Volume that you are a buyer. or seller.

That's the thing when you looking at the order book, you dont real know what everyone is doing when buying or selling. when you get traders buying the BID and for sells Selling the OFFER. If 50% are buying the bid and 50% are buying at market, does it show up in volume what they are doing. Few!! I bet to stop it confusing me now
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Old Sep 27, 2005, 5:50pm   #5
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doesn't it depend on what platform you use , some will show , if the buyers and sellers actually hit the bids and offers and or if they were buying at the bid and selling at the offer ?
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Old Sep 27, 2005, 6:06pm   #6
 
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It does. The actual prices traded could include "last done at xxx Ask" or "yyy Bid".
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Old Sep 27, 2005, 7:42pm   #7
 
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Quote:
Anyway the question to you Volume fans. If you buy at the BID does it show up on Volume that you are a buyer. or seller.
If you buy at the bid then someone else must have have sold to you, perhaps with a market or stop order. It will show up as a transaction completed at the bid price, simple as that.

Quote:
If 50% are buying the bid and 50% are buying at market, does it show up in volume what they are doing.
This would mean 50% are passively buying from aggressive sellers willing to sell at the bid price, while the other 50% are aggressive buyers willing to pay the ask from passive sellers. A recipe for a battle, perhaps.
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Old Mar 30, 2010, 7:33pm   #8
Joined Mar 2008
Re: buy the bid and sell the offer

Same topic but slightly different. Can someone explain the following.

When I trade spread bets I buy on the offer and sell the bid! ???
With direct market ... I Buy the bid and sell the ask! and again!
Can you please explain.
Thank you
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Old Mar 30, 2010, 9:25pm   #9
 
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Re: buy the bid and sell the offer

Anyone have any good videos or tutorials on reading/understanding level 2 or the dom?

If the bid is heavy and more people are joining on the bid, this means they are wanting to buy so is this bullish? If they were really that bullish and wanted to buy why didn't they just hit the ask?
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Old Mar 30, 2010, 9:43pm   #10
 
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Re: buy the bid and sell the offer

Maybe they want to buy 61s rather than 62s

In reality reading the DOM and order flow is an art form. I suggest starting out on betfair with an app that will give you a ladder interface to do it with. That's the easiest thing I've ever traded.
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Old Mar 30, 2010, 9:58pm   #11
Joined Feb 2010
Re: buy the bid and sell the offer

Quote:
Originally Posted by magten View Post
Same topic but slightly different. Can someone explain the following.

When I trade spread bets I buy on the offer and sell the bid! ???
With direct market ... I Buy the bid and sell the ask! and again!
Can you please explain.
Thank you
with direct market you can buy bid and sell offer , or you can 'buy at market' which is buying at the offer selling at the bid.
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Old Mar 30, 2010, 9:59pm   #12
 
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Re: buy the bid and sell the offer

Cheers arabianights.

I thought that but I think if you are bullish just hit the ask, 1 tick/pip ain't gonna make much difference. I know it does to bigger players.

Is the inside bid and ask the most important?
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Old Mar 30, 2010, 10:25pm   #13
 
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Re: buy the bid and sell the offer

Quote:
Originally Posted by samuelhogg View Post
Cheers arabianights.

I thought that but I think if you are bullish just hit the ask, 1 tick/pip ain't gonna make much difference. I know it does to bigger players.

Is the inside bid and ask the most important?
It really is dependent upon the instrument how important the spread is. STIRs, which I trade, have tiny tick ranges almost all of the time and thus successful day trading of them usually, but not always, involves earning the spread for at least one of entry or exit, and ideally both.

If you are very bullish for sure lift the ask (it's hit bid/lift ask btw, as a point of pedantry) as in this case you are demanding liquidity because you need a fill. Supplying liquidity, by providing a bid and ask, is a different art... One is not necessarily bullish or bearish, one has a view on what the market wants, and then one trys to make a bid and offer around it.

Incidentally trading like that (supplying liquidity voluntarily) is still different from market making when one has an obligation to provide a two way quote x% of the time. I've no experience of doing that formally and am not sure precisely what difference doing so makes.
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