That shows the volume being offered at those price levels. So if you see bid 10 with a size of 500 and an ask of 10.07 with a size of 1000 then you know you can buy up to 1000 shares at 10.07. If you place a market buy order for 5000 shares you will very likely end up paying more, e.g. the first 1000 shares at 10.07, the rest at higher prices. Have you ever seen a level2 display? If not you should try to check it out, its very helpful to understanding how the market works.
You really need to utilize the tools provided. Bid Size and Ask Size can be found here. - Spydertrader
If I'm a seller, can I not ask what ever price I want (knowing that I may not sell if the price is too high?) Also, as a seller can't I bid whatever price I want and if the buyer is willing to pay then great? If I'm wrong, then what determines the ask and bid prices?
you hit the nail on the head. don't let them make it out to be any more complicated than a normal purchase of say...a house. for some reason people equate stock quotes to some exotic thing. If you are looking for a house and the guy's asking 100k, you don't HAVE to pay 100k. You can offer him whatever you want. Of course he can tell you to go f*ck yourself...but the issues the same. If you buy the house and want to turn around and sell it tomorrow, you'll have people bidding for your house. Now you can tell them to go f*ck themselves if you're getting bids at a lower price than you want. It's no difference in stocks.
Not trying to make it more confusing for you, but this firm has the settlement rules wrong here. from the link "Cash accounts that demonstrate a pattern of using unsettled sale proceeds towards new purchases and then selling the newly purchased shares before the sale proceeds have settled, will be restricted and coded âFUNDS IN ADVANCE OF TRADING DUE TO GOOD FAITH VIOLATIONSâ for a period of 90 days." the accounts should be restricted on the first instance of this occuring, not AFTER demonstrating a pattern. This is freeriding and is the reason the Fed has been cracking down and the SEC suing firms.
a retail firm (maybe not e-trade) is a better place to start if you don't know what you're doing compared to a direct access broker. you'll have more of an ability to have them help you there than say ib imo.
No, you are right. You can ask for whatever you want. You may not get filled however unless you take the bid/ask. Also when you place limit orders other people see your intentions and make play games to mess with you. Its the difference between papertrading and doing it for real.
Thanks spreadgod! SO if I understand correctly, even with an ask price of .10 and a bid price of .11, I could still ask .11 and bid .10. My bid could just remain at the bottom of the pile for a while, and may eventually get filled, or not, and the same with my ask.