What Is Ask Size?
The ask size is the quantity of a security that a market maker offers to sell at the ask price. A higher ask size indicates more supply available for sale. When a buyer wants to purchase, they can accept the ask price. They can buy up to the ask size at that price. Furthermore, if a buyer wants more than the current ask price, they might pay a higher price to the next seller.
Ask size contrasts with bid size. Bid size represents the amount people want to buy at the bid price.
Market makers offer to buy and sell securities. They must state their asking price for a security, known as the ask price. They must also specify the amount they’re willing to sell, known as the ask size. Market makers also declare their bid price and bid size. When a customer order arrives, it’s filled by the market maker with the lowest ask price for buys. For sells, it’s the one with the highest bid price.
Also, in a price quote, ask and bid prices usually appear in brackets. These numbers show shares in lots of 10 or 100 pending as limit orders. They are bid and ask sizes. They signify the total number of pending trades at given prices.
How Bid and Ask Prices Work
Consider a stock quote for XYZ Corp. It has a bid of $15.30 (25) and an ask of $15.50 (10). The bid price is the highest price someone is willing to pay for XYZ stock. The ask price is the lowest selling price. Numbers after bid and ask prices show shares pending at those prices. For example, at $15.30, there are 2,500 shares ready for purchase. This total can come from one or many bidders. The same logic applies to the ask price.
Lastly, the gap between the two prices is the bid-ask spread. If an investor buys at $15.50 and sells at $15.30, they incur a loss.