Imagine you’re buying mangoes in the market. The vendor is selling them for Php60/kg. (ASK). You bargain with her to give it to you for just Php50/kg. (BID).
Same thing with buying or selling stocks. As I have mentioned in my previous post ‘How to Buy Stocks’, the rule is: ‘Buy at the ASK, Sell at the BID’. If you are buying, you look at the ASK. If you’re selling, you look at the BID.
And for easier recall, use the acronym B.A.S.B. which you may give whatever meaning to, whichever works for you. Here are some suggestions:
1. Buy And Sell Business
2. Brother And Sister Bonding
3. Be A Successful Businessman
4. Bakit Ang daming Sumusulpot na Bading? (di naman nanganganak! /wahaha Haha J. ♥♥♥ Love you friends!♥♥♥)
Personally, I prefer ‘Basta Ako Beautiful & Sexy!’ /hmm
Today, I will explain what the columns for Bid and Ask mean. As usual, we’ll do this by looking at the image first before reading the description that follows.
Buy at the ASK
First make sure that the market is open (M-F, 9:30-11:30am, 1:30-3:30pm). In this case, it’s only a few minutes before it opens so it says ‘Pre-Open’ under Market.
We’re buying Ayala Land Inc. as an example. Once you type the Stock Code on the 1st box (in this case, ALI), all the info about it will appear on the right side.
On the ASK board, you’d find the top 5 lowest ASK prices: 27.20, 27.30, 27.40, 27.50 and 27.60. Beside them, you will find the total number of shares being offered, as well as the number of people offering them.
The 1st row shows: 27.20 – 5,500 – 4
So, for ALI, the lowest ASK price that you can buy it for is 27.20. There are a total of 5,500 shares being offered at this price. And there are 4 traders offering them.
Same thing for the 2nd row: 27.30 – 900 – 2
The 2nd lowest ASK price for ALI is 27.30. There are 900 shares being offered at this price. There are 2 traders offering them.
And so on and so forth.
Thus, if you want an immediate execution of your order, refer right away at the price in the 1st row of the ASK box.
What happens if you had mistakenly put in a higher price?
As I’ve shown you in my post ‘How to Buy Stocks’, your order would still be executed at the lowest price being offered.
How about if you put in a lower price than the lowest ASK price?
In that case, your order will not be immediately executed. It will then be considered a Day Order. You will be bidding against other buyers and you will have to wait within the day for a trader to accept your Bid price before your order gets executed. If no trader offers the stock at your Bid price within the day, your Order will be automatically cancelled.
We, Truly Rich Club members, are lucky because we use the very same strategy that Warren Buffet uses: SAM.
So, when we get a ‘Stock Alert’ from Bro. Bo suggesting we sell a particular stock, I get super excited coz then I’d see how much profit I’ve made from my shares. With Jollibee, I made over 1k when I sold them (I only had 40 shares. Imagine if I had more?)
Sell at the BID
Since, we are selling, we will be looking at the prices (BID) that people are willing to pay for our stocks. We’re still using ALI as our example.
The 1st row shows: 12 – 2,100 – 27.20
This means that there are 12 people wanting to buy 2,100 (in total) shares of ALI at 27.20.
Same goes for the 2nd row: 6 – 700 – 27.15
6 people wanting to buy a total of 700 ALI shares for 27.15.
And so on and so forth.
That’s it for now. I hope y’all learned something from this post. If yes, then please feel free to tweet, like and share!
Thanks & God bless,