Bid Quantity And Ask Quantity: The stock market is the institution where huge quantities of shares are bought and sold on a daily basis. A stock is viewed as healthy and the traders are actively engaged in it if there are a large number of shares being purchased and sold.
Furthermore, a dip in the trading quantity indicates the traders losing interest in the stock and moving on to a different stock. Learning to interpret the quantities traded can help make strategic decisions while making your trading decisions.
This quantity is split into bid quantity and ask quantity. In this article, we will cover bid quantity and ask quantity, as well as the significance of each sort of quantity’s dominance.
What Are Bid Price And Ask Price?
Before we move along to understand the meaning of bid quantity and ask quantity, let us first understand what bid price and ask price mean.
The bid price is the price an individual is willing to pay in order to buy a security, asset, or commodity in the stock market. In simple terms, these are the prices at which individuals are ready to buy the securities.
The security, asset, or commodity will have different bid prices and the highest bid price is the best bid price which will be executed first.
Example: If the price of the share is trading at Rs100 and the different bid prices for the share are Rs 100, Rs 99, Rs 98, Rs 97. Here, the order of the individuals who have offered the highest bid price of Rs100 will be executed first.
Ask price is the price an individual wants to receive while selling a security, asset, or commodity in the stock market. In simple terms, these are the prices at which individuals are ready to sell the securities.
The security, asset, or commodity will have different ask prices and the highest bid price is the best bid price which will be executed first.
Example: If the price of the share is trading at Rs101 and the different ask prices for the share are Rs 101, Rs 102, Rs 103, Rs 104. Here, the order of the individuals who have offered to sell at the lowest price of Rs 101 will be executed first.
Now that we have understood what the Bid price and Offer price is, let us now understand what the bid quantity and ask quantity is.
Bid Quantity And Ask Quantity
Bid Quantity: It is the number of securities the individuals are willing to purchase at a specified bid price. It represents the demand for security at different price levels.
The bid price with the highest quote will be displayed on top of the Bids (generally on the left side of the screen).
Ask Quantity: It is the number of securities the individuals are willing to sell at a specified ask price. It represents the supply of security at different price levels. The Ask price with the lowest offer price and it is the last price on the offer side.
Let us see how the big and ask prices look in the table along with their quantities.
| Bid Quantity | Price | Ask Quantity |
| 30.15 | 3000 | |
| 30.14 | 4500 | |
| 30.13 | 1500 | |
| 30.12 | 2000 | |
| 30.11 | 3500 | |
| 5000 | 30.10 | |
| 3000 | 30.09 | |
| 2000 | 30.08 | |
| 1000 | 30.07 | |
| 500 | 30.06 |
What happens if bid quantity is higher than ask quantity?
When the security is experiencing more Bid quantity than the Ask quantity, this means that the demand for the security is high and the price is expected to go higher.
When the security is experiencing more Ask quantity than the Bid quantity, this means that the supply for the security is high and the price is expected to go down and we could see selling momentum.
Also Read: What is Disclosed Quantity in Share Trading? How to use it?
In Closing
In this article, we discussed what is Bid price and Ask Price, Bid Quantity and Ask Quantity, and also covered what it means when theres a difference between the Bid Quantity and Ask Quantity.
Though bid quantity and ask quantity give a short-term indication of where the market is heading. As quantities keep on changing, it should not be the sole indicator a trader should rely on for his trading decisions.
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