CandleFocus

Handle

A handle is an important part of a price quote that conveys the general price level on a security or index. It is the part of a quote that exists to the left of the decimal point in the full quote and is often referred to as the “big figure”.

In the financial market, a handle is used to quickly comprehend the current pricing of a security or index. It typically includes both the dollar amount of the quote and the digits on both sides of the decimal point, giving traders a more comprehensive view of the current market position.

Understanding the handle can help traders analyze the prior and current trades in both the stock and futures markets or look at the depth of the available buy and sell orders. The handle can also be used to gauge market volatility and the overall trend of an asset.

Traders should pay close attention to the handle when trading. Although the handle does not provide detail on the spread of the price, it does give a general sense of the overall value and direction of the security. A handle can increase or decrease in two ways: incrementally in one cent increments (in the case of equities) or nominally in larger increments. In the case of Forex markets, the handle can move both incrementally (in hundredth’s of a pip) or nominally in larger one pip increments.

Given that a handle can drastically change with both market conditions and volatility, it should be updated continuously. For the most accurate pricing, most traders use computers to monitor the handles on the major indices, which can be done in the fraction of a second.

By being aware of a handle and watching for changes, traders can act quickly to capitalize on opportunities and make a profit.

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