Reading the BID vs ASK Tutorial (Market Size vs Market Depth)

<p>Auction market → always displays the “best available price” at any given time (aka the BID and ASK)</p> <ul> <li>BID = highest price people are willing to pay.</li> <li>Ask = lowest price people are willing to sell at.</li> </ul> <p>NBBO “National Best Bid and Offer” shows the highest (BID) and lowest offers (ASK) for a security among all exchanges and market makers. This data may not be sufficiently up to date, so investors may not get the prices they were anticipating upon trade execution, a concern for high-frequency traders</p> <p><u>“Market size”</u></p> <p>Indicates how many shares are available at the BID and ASK prices.</p> <p><u>“Market depth”</u> (Also called level 2 quotes)</p> <p>Indicates nb of shares are available at each and every price that is inf to the BID and suprir to the ASK.</p>