Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01 -- Ignore unavailable to you. Want to Upgrade?

To: Brian Gross who wrote (2257)	7/16/1998 11:37:00 PM
From: James Strauss	Read Replies (3) \| Respond to of 13094

>>>When you buy a stock you have to buy it at the ask, and when you sell a stock you have to sell it at the current bid. How do these orders get filled if the Bid and Ask never change? the reason I ask this is because I often see the lot sizes change throughout the day without the bid and ask ever changing. I have often placed a buy order at the bid price and never had it filled while hundreds of thousands of shares have traded hands. Sorry to bother you with these questions, but nobody I've talked to seems to understand this either.<<< ********************************************************************** Brian: The market makers match up the buy orders with the sell orders... The orders to buy or sell can either be market orders or limit orders... The market order will get the buyer the stock at the ask price and the seller at the bid price... It's possible that where there is an even balance of buy and sell orders that are predominantly market orders, the bid and ask may stay the same... What changes the bid or ask is if there is an imbalance of buy or sell orders... An example would be Egghead Software (EGGS)... When it became hot, everyone wanted to buy it... The market makers had more buy orders than sell orders... So they started raising the ask price to entice people holding EGGS to take profits... So, some of these people start selling their EGGS stock to lock in the quick profits... Other people see EGGS rising and put in orders to buy... The Market maker needs more inventory, so they continue raising the ask to entice more people to sell... The cycle keeps going on and on until the buying dries up... Then the cycle reverses as people want to lock in profits and start selling... If the number of shares offered for sale are greater than the number wanting to buy we have another order imbalance... The market maker will start lowering the bid to entice more buyers... As the bid continues to drop more buyers come in to reduce the market maker's inventory... It's all supply/demand driven... Jim