Bid/Ask Share Size?

C

cashclay

Im tryng to understand this. For ex: if the bid shares are 13,000 and the ask shares are at 14,000; are the chances of the stock price going toward the bid price?
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You probably need a wider variance from the example you've given to start making any assumptions. Look at the spread, its .01. Too tight to call on that example.
 
I believe what the OP is asking is whether the future short term price movement can be deduced from the relative sizes on the bid and on the ask.

The answer is, of course, "it's not that simple".
 
What i am asking is if the shares on the ask is higher then the bid; would be it harder for the stock to go above the ask. people keep tellin me to look at the bid and ask size to help determine where it might move . But i cant figure it out. Sometimes the ask share size is higher then the bid but yet the price goes above the ask price
 
yes nonlinear thats what im asking. If the ask size is higher it means that more people are willing to sell rather than buy. so wouldnt that mean the stock might have a better chance of going down? im so confused about this
 
I'm not aware of any data that shows that size means the stock is moving in one direction. I have hard both sides. Big sell orders "scare bid away" or mean lower prices and that big sell orders attract size buyers looking to buy blocks without moving prices.

Those types of assumptions are hard to make money on.
 
cashclay said:
yes nonlinear thats what im asking. If the ask size is higher it means that more people are willing to sell rather than buy. so wouldnt that mean the stock might have a better chance of going down? im so confused about this
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There are two competing schools of thought on this.

From the classical school of thought, the size on the bid represents the demand, and the size on the ask represents the supply. When the sides are imbalanced, the price will move to find the equilibrium. From this point of view, yes, if the bid size is smaller than the ask size, the prices will move down to the bid.

From the competing "market theory" perspective, the market "seeks liquidity", so it would move towards the higher size, to the offer.

So, here are the two theories, and they predict opposite price movement. Figure it out from there.
 
nonlinear5 said:
From the competing "market theory" perspective, the market "seeks liquidity", so it would move towards the higher size, to the offer.
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Im osrry what do you mean by this. If it seeks liquidity wouldnt that mean it would go to the lower since it can get rid of it quicker. does liquidity mean something that can be bought or sold quickly.
 
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In this case since the bid size is smaller wouldnt the market go for the smaller size since it wwould be more liquid ??? Im so sorry for my confusion. The ask is 21,000. that would be much harder in terms of liquidity
 
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