Hello all!
I have opened an account with a broking firm. In it's online trading portal, I can see two columns namely best buy and best sell in each and every stock's price details. Can any one tell me what is this best buy and best sell? please check this image below:
To my understanding, It is market watch window which shows the 5 Bid and 5 Offer prices. The buyers and sellers are arranged in descending and ascending order for execution. That is the way market is created. The last 5 Buy Prices near to LTP in descending order, and last 5 Offer Prices near to LTP in ascending order along with no. of shares. It is 5 prices and quantity at which buyers want to buy low and sellers want to sell high.
This gives momentarily idea (idea, not assurity) with the help of Quantity, where the herd wants to move. Say for total 5 bid offer has a quantity of 100, and 5 offer has total quantity of 200. Then it means that no. of sellers are more then buyers. And price can drift lower. But this is a chance. As sellers doesnt lower their offer and Buyers increase their bid then price can drift higher. it all depends upon the market sentiment where they want to lower the offer or increase the bid with quantity.
It is also helpful in trading stock options. As we can know where the last traders wants to sell and buy. Where can be the next LTP.
It is just how i read it. It can be totally different for some one else. But is extremely helpfull.