When one sees, say, a 500 lot on the bid, this could just as well represent a limit order to buy entered at the bid as it could a market order (or limit order) to sell at the bid, correct? Indeed, the only grounds one would have to assume that said order was the result of someone "hitting the bid" would be if the bid dropped a tick on the transaction, and vice-versa on the long side. Am I correct in my reasoning here? Or have I missed something? Thanks for anyone's help with this
Seems like you may be getting you level 2 and T&S mixed up. Level 2 shows bids and offers and the TAS shows trades that have gone thru. You seem to just be overthinking it. "hitting the bid" is just someone selling and getting filled (short/flat) on the bid.
Ok, fair enough -- and I appreciate that clarification. I'm still uncertain about this, however: In the T&S window (that's all I'm looking at, T&S) when one sees 500 contracts fly by on the bid on, say, the ES, one has no reason to assume that these 500 contracts represent some elephant's desire to SELL. In fact, it could be 500 contracts that were sitting on the bid. In other words, the simplistic interpretation -- that this 500 lot represented "selling pressure" -- is erroneous. The only time "selling or "buying" pressure can be inferred from T&S is when the bid is lowered or the offer lifted. True? Not true? Or something else entirely? Thanks again
You could be watching the "closing" side of a trade. What if I was long from this morning and sold to flatten my position? A 500 lot is really not huge in ES. lefty
There is always 2 sides to a trade, so yes when someone hits the bid it means that there was someone of equal size sitting there on the bid. so it is true that one 500 print isn't going to move the ES's (or put a ton of pressure on it) but a large print can start a string of prints. It all depends on the situation. If you keep watching the TAS and you will understand it more.
If the bid is being hit it means people are willing to pay the spread to close a long or get short. Of course there had to be someone also buying on the bid, but they were not willing to pay the spread. This means at that point in time there was more selling pressure. It would also indicate further selling pressure if the bid drops, like you mentioned. Hope that clears it up.
Yes, I saw that, and thank you -- and thanks to everyone else for their comments. But, not to beat a dead horse here, I'm not sure the answer has soaked through my thick skull quite yet, so bear with me while I take another pass at it. I'm not suggesting that 500 lots is a consequential sum on the es -- I picked that number out of a hat as an example. So, for now, let's forget about the number. Let's just call it "n". When on one's T&S window, it reads "N" contracts on the bid at 1440.50, say, my question is whether I am safe in assuming that this represents "selling pressure" -- however modest, or inconsequential that pressure may be. Bear with me while I grind my way through this. In such a case, someone may have just had his/her "n" contract order to buy filled after letting it sit there on the bid for a few moments. That order to buy "n' contracts at the bid might have been filled by an equal and opposite order to sell "n" contracts on the bid, or it might have been filled by "x" number of smaller lot orders that, collectively, add up to "n" contracts. So I guess it comes down this... That order for "n" contracts, which had been sitting on the bid at 1440.50, would only be filled once the bid had moved down to 1440.25 and once the offer had also moved down a tick, to 1440.50. That order for "n" contracts, then, would show up as an order on the offer, and the opposing orders used to fill this "n" contract order would show as orders on the bid -- "hitting the bid". So, bottom line, one is justified in assuming that when an order on the bid registers on the T&S window, this represents selling "pressure" (again, however inconsequential that pressure may be), and vice-versa for an order on the offer. Whew. Anybody read this far? Have I got it right?
Level 2 has the bids and offers, the TAS only shows buys and sells. So you can't see any bids on the TAS you only see trades. I think you are just looking at things backwards. Like if you see a print on the TAS that hit the bid you should just think "that is a sell", don't think about the bid that was there to fill that sell. You can be filled on the bid at 1440.50 and the ES's can go up so that 1440.25 never gets hit. Or maybe you bid 1440.50 and when you get filled someone bids more at 1440.50 and again the bid never touches 1440.25. So getting filled on the bid doesn't automatically mean the ES's will fall down to the next bid. I don't understand that sentence. Yes, but you are looking at TAS backwards. Forget about who bid and who offered and just think about it as a buy or a sell. So hitting the bid is a sell and taking the offer is a buy. If you bid and you are hit then on the TAS your trade shows up as a red/sell/bid hit print.