how to make sense of 'latest trades' info

[jonboy123]

bid 8.50
offer 11.50

latest trade
11.50
5000 shares

So the 5000 shares, would this mean somebody bought them, as they were 11.50?

And so if it was a seller selling the 5000 shares, it would show up as 8.50 as the price. ?

But someone buying for 11.50, the offer price..... also means somebody sold...but sellers can only sell for the bid price, 8.50.....when someone buys the offer price, that means a seller sells the offer price too....or does the seller only get the BID price, and the rest is spread/slippage etc....?

how are we to interpret this info? from the viewpoint of the seller or buyer?

 

[Trader333]

And so if it was a seller selling the 5000 shares, it would show up as 8.50 as the price. ?

No they were bought and sold for 11.50. The person on the bid at 8.50 is offering to buy some at that price but the last trade was from someone wanting to sell at 11.50.


Paul

 

[foredog]

If it's an electronic market like most FTSE100 companies and futures then the 11.50 offer would be someones limit order on the order board, sitting there waiting to be taken, if you're desparate to sell then you'd hit the bid at 8.50 (killer spread though!)

 

[jonboy123]

No they were bought and sold for 11.50. The person on the bid at 8.50 is offering to buy some at that price but the last trade was from someone wanting to sell at 11.50.


Paul

thanks......
but..... BID is what people are willing to pay...but they dont get it for that price....if bid is what people are bidding (like in ebay)....how come the OFFER is the real buy price?

so the last trade....is basically a BUY and a SELL, WHICH took place at price of 11.50....thats it? ....tahts all we can say? so the seller actually got the 11.50? he didnt get the 8.50 BID price? if we wanted to sell, we would get the BID price(in a normal trade)....but the seller here got the offer............

sorry..... this is slightly convoluted.....

 

[foredog]

thanks......
but..... BID is what people are willing to pay...but they dont get it for that price....if bid is what people are bidding (like in ebay)....how come the OFFER is the real buy price?

so the last trade....is basically a BUY and a SELL, WHICH took place at price of 11.50....thats it? ....tahts all we can say? so the seller actually got the 11.50? he didnt get the 8.50 BID price? if we wanted to sell, we would get the BID price(in a normal trade)....but the seller here got the offer............

sorry..... this is slightly convoluted.....

The BID is the price someone is willing to pay, so if you want to sell at that hit the bid.

But someone else wants to sell at 1150 so they are the offer.

A third person wants to buy these NOW becasue they think it's going up, so they take the offer at 1150 and the person who was on the offer at 1150 has sold them.

In EBAY terms the bid is for people waiting until then end of the auction to see if they can buy at that price, the offer is "buy it now" price. (reverse for sell)

 

[Trader333]

Foredog is right, if someone wants to buy immediately and the only price that someone will sell at is 1150 then that is the only option for them. The opposite is also true in that if someone wanted to sell immediately then the only option they have is to sell at 850 then that is what they will get for them.

You are making this far too complex all you see is what one group are willing to buy at (ie the Bid) and another group willing to sell at (ie the Ask). There will be no transaction between these two groups until they move towards each other. So either sellers need to accept they will get less or buyers need to accept that they will have to pay more or a combination of both.

In the above case it looks like someone who was not on either the bid or ask side of the trade placed a market order to buy and that means they got them at the lowest price someone was willing to sell at which was 1150.

As said previously you cannot buy the Bid price and all you can do is join a queue of others who want to buy at that price., If no one ever wants to sell at that price then you will never get filled.


Paul

 

[jonboy123]

If it's an electronic market like most FTSE100 companies and futures then the 11.50 offer would be someones limit order on the order board, sitting there waiting to be taken, if you're desparate to sell then you'd hit the bid at 8.50 (killer spread though!)

but if i had those shares and i hit SELL, i would only get the BID price (the lesser amount), or should selling only be done with a limit order ie. Sell at 11.50 only.

ive only purchased and sold shares at best market value, ie what the online broker offers me.
Is this the best way? or should i use limit orders to sell , or even buy?
Would you have to sit around and wait for limit order to be filled, or do you get told instantly?

 

[foredog]

It's a question of time and money.

Do you want to be out now at the current bid?

or

Do you want to leave a limit on (or inside) the offer and maybe get taken and gain more BUT risk not getting taken and price going down?

 

[jonboy123]

It's a question of time and money.

Do you want to be out now at the current bid?

or

Do you want to leave a limit on (or inside) the offer and maybe get taken and gain more BUT risk not getting taken and price going down?

if i was selling i would naturally want the OFFER price as this is what the sellers are OFFERING to sell at to the market buyers.
If i was buying i would want a price close to the BID price.

do limit orders get filled or not filled straight away? is it a waiting game? or instant decision? if its instant, i would try a few limits, then just buy waht was offered to me.

 

[foredog]

You're not really getting this.

Think EBAY, you're looking at a car on with a buy it now price of £10000

The seller is therefore on the offer at £10000

there are 10 bids on there at prices up to £9000 so the market is 9k -10k

If you want to buy the car now you take the offer at 10, if you fancy it but don't really want to pay more than 9500 then you pop a bid up and wait. you might be the highest bid and get it for 9500 or someone else may take the offer at 10000 so you don't get the car becasue you didn't pay up.

On the other hand the seller sees that with 10 mins of the auction remaining no one has bid over 9000 so he changes his reserve to 9000 (basically hitting the bid) so the person at 9000 patience has been rewarded and he's got the car BUT if you'd gone 9500 bid he'd have missed out.

Limit orders are for if you're willing to wait for the market to come to you.

If it's dropping like a stone then a limit order won't do much good becasue no one's going to take the offers when the bids are getting hit so then you'd sell at the bid.

 

[jonboy123]

You're not really getting this.

Think EBAY, you're looking at a car on with a buy it now price of £10000

The seller is therefore on the offer at £10000

there are 10 bids on there at prices up to £9000 so the market is 9k -10k

If you want to buy the car now you take the offer at 10, if you fancy it but don't really want to pay more than 9500 then you pop a bid up and wait. you might be the highest bid and get it for 9500 or someone else may take the offer at 10000 so you don't get the car becasue you didn't pay up.

On the other hand the seller sees that with 10 mins of the auction remaining no one has bid over 9000 so he changes his reserve to 9000 (basically hitting the bid) so the person at 9000 patience has been rewarded and he's got the car BUT if you'd gone 9500 bid he'd have missed out.

Limit orders are for if you're willing to wait for the market to come to you.

If it's dropping like a stone then a limit order won't do much good becasue no one's going to take the offers when the bids are getting hit so then you'd sell at the bid.

sorry..im trying. thanks for helpin.

Its just ive been reading way of the turtles book and theres been a coupla things the book says and what the people here say on forum, that are in conflict.

Ive just tried something.
Im selling, i only get the BID price (the lower price)
oh. hang on. So i can sell instantly to match the BIDDERS price(s), or i can wait and put a limit order asking for the OFFER price...right?
But when someone BUYS shares, they buy at or close to the OFFER price, so the OFFER is coming from a seller, a seller is getting the OFFER price, but when i sell, i just get the BID price.

Let me think about it some more later. Bear with me.

In real practical examples, should i be just buying and selling at what the market allows me, like "at best" etc, or should i be limit ordering..?
Maybe when the spread is huge, then use a limit order, to attempt to get better value, but if spead is minor, jsut go with best market prices given to me....sensible thinking?

 

[raysor]

bid 8.50
offer 11.50

latest trade
11.50
5000 shares

So the 5000 shares, would this mean somebody bought them, as they were 11.50?

And so if it was a seller selling the 5000 shares, it would show up as 8.50 as the price. ?

But someone buying for 11.50, the offer price..... also means somebody sold...but sellers can only sell for the bid price, 8.50.....when someone buys the offer price, that means a seller sells the offer price too....or does the seller only get the BID price, and the rest is spread/slippage etc....?

how are we to interpret this info? from the viewpoint of the seller or buyer?

What was the stock, was it order driven or market driven?

 

[foredog]

sorry..im trying. thanks for helpin.

/sorry, me being grouchy

Its just ive been reading way of the turtles book and theres been a coupla things the book says and what the people here say on forum, that are in conflict.

there's different ways to trade, that's what makes a market, opposite opinions

Ive just tried something.
Im selling, i only get the BID price (the lower price) yes

oh. hang on. So i can sell instantly to match the BIDDERS price(s), or i can wait and put a limit order asking for the OFFER price...right?
yes. you can sell to the guy on the bid now at the lower price or wait and MAYBE get taken at the higher price

But when someone BUYS shares, they buy at or close to the OFFER price, so the OFFER is coming from a seller, a seller is getting the OFFER price
,becasue the seller put up an offer and waited rather than hitting the bids

but when i sell, i just get the BID price.

Let me think about it some more later. Bear with me.

In real practical examples, should i be just buying and selling at what the market allows me, like "at best" etc, or should i be limit ordering..? Genreally i tend to trade at the current bid/offer because while you're messing around trying to get an extra 1/4p out of the market you can end up missing the price and losing 2 or 3 p
Maybe when the spread is huge, then use a limit order, to attempt to get better value, but if spead is minor, jsut go with best market prices given to me....sensible thinking?yep, getting there

hope this clears it up a bit

 

[raysor]

You have got to try and find out what the real price is. Maybe from previous trades, how the MMs (if any) have changed their prices or what the RSP says.

 

[foredog]

You have got to try and find out what the real price is. Maybe from previous trades, how the MMs (if any) have changed their prices or what the RSP says.

And if you quickly find it's sh+++ting out then hit the bid!

 

[raysor]

All I know is that there is an "art" in good dealing. I would be hopeless at dealing, because I have never done it. I leave it to the "professionals".
Example today. Screen price (touch) 6.75/7.75p in 15k
One MM bidding for 250000.
One MM not interested.
Bought 180000 at 7.47
Actually I have just noticed the trade has been marked at 7.5
I will have to check that in the morning!

 

[jonboy123]

"What was the stock, was it order driven or market driven?"
I dont know the difference. It was Uk listed company, either ftse or AIM.
Are FTSE and UK companies order driven or market driven?

foredog = thanks.
So you cant just GET the OFFER price when selling, you have to put in a limit order, right?
ohhh...so a seller getting the OFFER price, when i BUY the OFFER price, is basically the seller waiting for this to happen...right?

Yeah, so stick to current bid/ask prices, but try a limit order when the spread is Huge. Good tactic?

raysor = real price? you mean like a moving average rough estimation. The real price is always changing though. What is RSP?

(thanks people)

I wasnt even looking at the spread before, I am now, it should be part of making a decision shouldnt it? I think big spreads are a sign of low liquidity and maybe more risky, and big spreads mean you are gonna have to hold the stock for longer, for it to recoup that spread, and THEN give you profits.
Small/little spreads are what we want, eh? Easier to trade in and out and not get burned by spread.
(im just thinking out loud here)

Can we do a calculation, like to judge the spread, as a percentage of the share price?

 

[jonboy123]

All I know is that there is an "art" in good dealing. I would be hopeless at dealing, because I have never done it. I leave it to the "professionals".
Example today. Screen price (touch) 6.75/7.75p in 15k
One MM bidding for 250000.
One MM not interested.
Bought 180000 at 7.47
Actually I have just noticed the trade has been marked at 7.5
I will have to check that in the morning!

15k volume of shares, how did you know this? Level2?
So did you put a limit order to buy at ....?

 

[raysor]

15k volume of shares, how did you know this? Level2?
So did you put a limit order to buy at ....?

Level2 tells you the price and volume the MMs MUST trade at. From my example you can see it is obviously not the "real" price. For example one MM was bidding for 250k. And also, as I said, I dealt in 180k at well below the offer.
"How did I know this?"
My dealer 'phoned all four MMs.

RSP: Retail Service Provider. These are subscription services from various Market Makers (each MM will have his own RSP for subscription,mainly to brokers, I suspect)
What I mean by the "real" price is the price you can deal at. For example if the screen shows 10-12p but you can see loads of trades going through at 10.5 and 11.5 you would assume that the price is really 10.5/11.5. However if you just put an order on at best or market you will sell at 10p or buy at 12p. How silly is that?

 

[jonboy123]

Level2 tells you the price and volume the MMs MUST trade at. From my example you can see it is obviously not the "real" price. For example one MM was bidding for 250k. And also, as I said, I dealt in 180k at well below the offer.
"How did I know this?"
My dealer 'phoned all four MMs.

RSP: Retail Service Provider. These are subscription services from various Market Makers (each MM will have his own RSP for subscription,mainly to brokers, I suspect)
What I mean by the "real" price is the price you can deal at. For example if the screen shows 10-12p but you can see loads of trades going through at 10.5 and 11.5 you would assume that the price is really 10.5/11.5. However if you just put an order on at best or market you will sell at 10p or buy at 12p. How silly is that?

Interesting.

So its good to look at the latest trades and see what they are being done at price wise. But i can never tell if its a buy or a sell.

Yes its silly. So when you know the OFFER price is not the realistic price, you go an put a limit order on at your desired price, right?

Selftrade and yahoo finance are not in agreement, selftrade says zero volume on certain days traded for certain companies, but yahoo says otherwise eg thousands or hundreds of thousands. Is yahoo finace a reliable source for pretty up to date data in the day?