What does a B/A size of “300X1000” on a call option mean? I have never actually purchased an options contract

9 Answers

• If you have stock or an options contract(s) and you want to sell the position you will receive the bid price. If you want to purchase stocks or options you will pay the ask price. The 300 means that there is a demand to sell for up to 300 shares at the quoted bid. 1000 means there is up to 1000 shares available to buy at the quoted ask price. In this instance there is more stock available to buy (supply/1000 shares/contracts) than to sell (demand/300 shares/contracts)

  The following excerpt on your question I found on a random website. (No I am not plugging this site):

  Demand/Supply at a Glance: Bid/Ask Sizes

  As previously mentioned, bid/ask prices are always posted with corresponding bid and ask sizes, which serve as measures of the strength and depth of the bid/ask prices. They tell us about the supply/demand pressures on a stock at a given moment. We can summarize important Bid/Ask size concerns as follows:

  A large bid size indicates a strong demand for the stock.

  A large ask size shows that there’s a large supply of the stock.

  If the bid size is significantly larger than the ask size, then the demand for the stock is larger than the supply of the stock; therefore, the stock price is likely to go up.

  If the ask size is significantly larger than the bid size, then the supply of the stock is larger than the demand for the stock; therefore, the stock price is likely to drop.

  Because bid/ask prices and sizes change quickly in real-time, supply and demand also change quickly in real-time. Experienced traders always pay very close attention to the bid/ask sizes of a stock to monitor the supply-demand dynamic. Short-term traders usually buy a stock only when the demand is higher and sell a stock if demand suddenly becomes lower relative to supply.

  One effective and widely used short-term trading strategy based on supply and demand is the following:

  Place a limit order to buy a stock at the middle ((bid+ask)/2) when you see that the ask size is small and the bid size is much larger (this strategy does not work if the stock price is quickly declining).

  Place a limit order to short sell a stock at the middle ((bid+ask)/2) when you see the bid size is small and the ask size is much larger (this strategy does not work if the stock price is quickly advancing).

  Example:

  In a relatively quiet trading period, suppose that you suddenly notice the following:

  Ticker Bid Price Ask Price Size (Bid x Ask)

  YHOO 124 1/2 125 1400 x 200

  You can place a limit order to buy 200 shares of YHOO at 124 3/4.

  Now suppose you see

  Ticker Bid Price Ask Price Size (Bid x Ask)

  YHOO 124 1/2 125 300 x 2800

  You could place a limit order to short sell 200 shares of YHOO at 124 3/4. Most likely you’ll get into the trade and the momentum will soon help you make a small profit. Then you can set a stop loss order at your entry price level to protect yourself from losing the trade.

• This Site Might Help You.

  RE:

  What does a B/A size of “300X1000” on a call option mean? I have never actually purchased an options contract

  – I want to purchase some call options, and I know what an option is (once it hits the strike price, it is in the money, and I can buy the stock and then cash it in), but I am having trouble understanding the terminology when I am trying to purchase stock options at my online trading account. (ie…

• 1

• Bid Ask Size

• Bid Size

• B indicates the number of buyers to A number of ask( sellers) , in other words, there are 3 to 10 as the ratio of buyers to sellers. More people are trying to sell than there are buyers

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• I think it depends