Price movement.

[jd1888]

Hi All

How many trades/contracts does it take for the price of a given instrument to move one point? Is the answer obvious and its just one or is it ten, a hundred, a thousand or even more?

Also is it the same for stocks, commodities, forex etc.

Thanks in advance for any help given.

 

[Hoggums]

You are asking the wrong question.

The price can move without any trades taking place at all - or 1,000,000 contracts can be traded and the price never moves.

It is entirely dependant on what orders are on the market. The trades themselves are irrelevant other than they take the orders off the book. But someone could just as easily add or remove an unfilled order which could move the market price.

 

[jd1888]

Hi

Thanks for the reply, my mistake sorry.

I guess the question now is if an order of one contract was removed from the books how many points might the market move?

and again is it the same across the different markets?

Thanks

 

[Vaco]

jd,

there is no one answer for this, every market will be different and even then that market will be different at different times of the day and different days of the week.

The quote on the screen is merely the current best ask/bid, if you have lvl 2 data then you can see how many contracts are on offer/bidded for at each price point.

If all the contracts at the current bid/ask were removed price would simply move to the next best.

to try and answer your question, in liquid markets during opening hours 1 contract prob would not move price on its own but please don't ask how many would as it can not be answered.

 

[joe4422]

I've traded some instruments that had a volume of over 100,000,000 shares traded and the bid/ask never changed.