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Non-Tech : Amati investors
AMTX 1.600-1.8%Jan 9 9:30 AM EST
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To: Bart who wrote (22807)8/13/1997 10:16:00 PM
From: SJS   of 31386
 
Bart,

It's bullish to have more buyers (bid size) than sellers (ask size). The BID is the best price a buyer will pay (and you can sell your stock with a market order). The ASK, of course, is the best price you can buy (and what someone wants you to pay).

If you see 200 Bid Size at 13 and 10 Ask size at 13 1/4, that means that there is a cumulative 20000 share demand to buy stock at 13, and only 1000 shares of stock for sales at 13 1/4. To me that means that some will move their bid, and we've got a market with more demand than supply. It's very interesting to have someone show you how this works on a machine with inside quotes (see later in discussion).

My rule is: I never use a market order, AND I sell at the ask, and buy at the bid...or try to. Some market order will certainly hit my offering if I am selling, or If I am buying someone will market order me some stock.

What we can't see in this deal is all the bids and offers "inside" the quoted prices. Some of the folks who actively trade or make markets in this stock use special machines that can see volumes more than we can just looking at the bid and ask. I aways use a limit order at or near the bid/ask (depending on what I am doing). There are always buyers and sellers there. The spread on the stock is what arbs make on unsuspecting market order folks. It's lots of money.

In any event, it is always going to be bullish when demand to buy is greater than demand to sell. I believe it's that simple.

Regards,
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