| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 797.1 | Buys at BID sells at ASK | UCROW::PEARSON | | Fri Dec 02 1994 10:46 | 2 |
| The specialist buys at the BID price and sells at the ASK price.
He makes his money on the margin or the difference.
|
| 797.2 | ? | DAVE::MITTON | Windows in '95 | Fri Dec 02 1994 11:41 | 12 |
| I'm uncomfortable with .1's simplicity. Because it doesn't explain
why the Last Trade price is neither.
I'm no expert, but I thought that the ASK price is the lowest that
anyone is currently willing to sell for, and the BID price is the
highest anyone is currently asking to buy for. As orders come in from
the outside world, things go up and down, and traders decide to meet
somewhere inbetween and consumate a deal. Each deal noted as the
last Trade price.
(now someone enlighten me)
Dave.
|
| 797.3 | | DIODE::CROWELL | Jon Crowell | Fri Dec 02 1994 11:59 | 6 |
|
I'm more confused now too... I just looked and saw that the
last sales price is higher than either the ASK/BID price.
???
|
| 797.4 | Perfectly legitimate | HELIX::SPIELMAN | jerry dtn 297-4879 | Fri Dec 02 1994 12:16 | 8 |
| re: .3
It is plausible that since the last sale (which matched something in
the range of Bid-Ask as it was before this last sale), the bid-ask
range is now different. So what you saw doesn't represent an
inconsistency. However it is more likely that there is still further
stock for sale at the previous ASK. (However, for NASDAQ stocks, this
theory as we know from newspapers is not adhered too.)
|
| 797.5 | | 12368::michaud | Jeff Michaud, UC1 | Fri Dec 02 1994 13:41 | 9 |
| I learned the hard way (well not that hard :-) that if you place
a market order with a broker for a stock, if you are buying you
pay the ASK price, and if you sell you get the BID price.
That's why I exclusively use limit orders now. And my buy orders
only get executed when the ASK price is at (or below) my limit price.
It's like paying two commisions, one to the broker, and the other
to the trader ....
|
| 797.6 | | ZENDIA::FERGUSON | Maybe so, maybe not | Mon Dec 05 1994 09:36 | 19 |
| re <<< Note 797.5 by 12368::michaud "Jeff Michaud, UC1" >>>
> I learned the hard way (well not that hard :-) that if you place
> a market order with a broker for a stock, if you are buying you
> pay the ASK price, and if you sell you get the BID price.
>
> That's why I exclusively use limit orders now. And my buy orders
> only get executed when the ASK price is at (or below) my limit price.
well, with all the heat on NASDAQ for big bid-ask spreads, they've introduced
a "quick fix" called N-Prove or some such. i read it a while back so i
don't recall all deatisl, but the jist of it is to allow us small traders
to buy inside of the bid-ask spread. you brokerage company has to be on the
n-prove system for this to work, and i reckon that you have to ask them
to use it...
anyone do a better job explaining this?
|
| 797.7 | more hard lessons | DAVE::MITTON | Windows in '95 | Mon Dec 05 1994 11:08 | 13 |
| Even limit orders are not fool proof for selling.
I recently expected a move in a certain stock and placed a Loss Limit
Order. The broker said it was "Best try" on such things and they
couldn't guarantee a reponse time or actual amount.
At the time the issue was trading at 25 1/2. I put a limit at 24.
They sold mine at 23. and it closed at 24 1/2 at the end of the day.
I'm sure baffled as to what happened.... and it was a NASDAQ stock. :-(
At least I'm now out of it.
Dave.
|
| 797.8 | Don't Use Stop Loss orders | HELIX::SPIELMAN | jerry dtn 297-4879 | Mon Dec 05 1994 13:36 | 26 |
| re .7
What probably happened is this: I assume your "LOSS LIMIT" order
was a "stop Loss" order. That means, once the stock got as low as your
limit, your order is turned into a "market order". That means that it
is to be executed at ANY price, once the limit is hit. When your order
is executed is at the whim of market makers (too some degree) under
current NASDAQ 'license to steal' rules. That is, maybe you should
have gotten 24 and 1/4 if your order was executed according to where it
stood on the books, but you'll never know.
Next time, just submit a "limit" order, not a "loss limit" order.
The former would have restricted the trade so you would have gotten
24.5 for your stock. However, the chances are it would not have
executed until someone was bidding 24.5 to buy. And even then, you
can't count on "when" your order gets filled. All you can limit is the
price you get. This could drag on for "days" so you may also want to
specify "good till canceled" on your order. I believe the default is
only good for the day.
Hope this helps.
|
| 797.9 | More on GTC and GTX orders | 12368::michaud | Jeff Michaud, UC1 | Mon Dec 05 1994 15:42 | 18 |
| Yup, I use regular "limit" orders. But there is one small gotcha
if you're not careful (or not around when the order is executed).
On any limit order, you may only get partial execution (the larger
the order, the more and more likely it could happen). If it's
a good til cancelled (GTC) order, that means if it got only partially
executed on one trading day, the order is left open for the remaining
number of shares, and it could get executed the next day. In this
case you have to pay two seperate commisions (multiple partial
executions that occur during one trading day count for commision
purposes as one trade). You can ask for what's called a "All or
Nothing" qualifier on your order, but according to Waterhouse
literature they have almost no standing on the trading floor.
An extra benifit however about GTC orders is that for alot of stocks
they are actually what Waterhouse calls GTX orders, meaning the
order is subject to extended trading. Ie. between close of trading
day at 4pm til something like 4:45pm, when the traders go through
their books matching buy/sell orders that work.
|
| 797.10 | clarification? | MIMS::KINSER_J | | Mon Dec 05 1994 16:37 | 14 |
| reg: .0
Based on the reply's to this note I watched the LAST TRADE PRICE, BID,
AND ASK prices on DEC today. For most of the afternoon, the BID price
was 34.000 and the ASK price was 34.125. During this time, the LAST
TRADE price went from 33.875 down to the current 33.625.
Question:
Why did the last trade price drop while the BID and ASK prices never
changed? I would have expected the BID and ASK prices to follow (or
actually lead) the LAST TRADE price down.
Jeff Kinser
|
| 797.11 | | CADSYS::RITCHIE | Gotta love log homes | Mon Dec 05 1994 16:45 | 2 |
| Could be a bug in the data the quote server is giving you. Like the bid and
ask prices got stuck at some point.
|
| 797.12 | RE: 797.10 - A Possibility | USCTR1::WOODWARD_D | | Mon Dec 05 1994 19:14 | 3 |
| If volume was not particularly high at the time, maybe the BID would not
accept a partial fulfillment, but was too big (number of shares) to match
up with an at-market order.
|
| 797.13 | doubt it | MIMS::KINSER_J | | Mon Dec 05 1994 22:15 | 3 |
| This occurred from 1:00pm until close today.
jeff
|
| 797.14 | NASDAQ == license to steal (as another noter says) | 2155::michaud | Jeff Michaud - ObjectBroker | Thu Jun 06 1996 21:03 | 11 |
| Can you believe the bid/ask spread on this one! (especially
given the volume, those rip-off NASDAQ spreads usually appear
on thinly traded stocks ....)
Symbol: PRST (PRESSTEK INC)
Last Trade: 77 1/2, Change -31 1/2 (-28.90%) at Jun 06 4:01:38
Bid & Ask: 75 1/2 & 78 (spread 2 1/2)
Low & High: 60 & 90 (spread 30)
52 Week Low & High: 38 1/2 & 200 (spread 161 1/2)
Volume/# of Trades: 3635900 / 7503 (484 shares/trade)
P/E: 368.10, EPS: 0.30
|