Bid Size
Candlefocus EditorThe bid sizes at the best available bid prices are all reflected in the Level 1 quotation. This indicates how many smaller investors are bidding (or offering) buy/sell orders, and how interested they are in disposing of their shares in the market.
The Level 2 quotation, on the other hand, offers investors the opportunity to get more in-depth information on market demand. It provides details on the quantity and price of many bids and offers. This information helps investors to make more informed decisions while trading. It also serves as an important tool in determining the entry and exit points in a security.
Apart from investors, traders and brokers can use the bid size to gauge the sentiment of the market. A larger bid size indicates that more traders are interested in the security. An increasing bid size also might serve as a signal for investors to follow the market trend. investors then would assess the bid size along with other financial indicators to make the decision of whether to buy or sell.
In conclusion, bid size is an important tool for investors and traders as it aids in decision making and offers a gauge for market sentiment.