Investing in Philippines: Correction: Starting Bid and Ask price


Monday, July 12, 2010

Correction: Starting Bid and Ask price


If you remember my post regarding the rules of the fluctuations of the bid and ask quotes, there is a clarification I have to make. Click here to re-read PSE website: Board Lot Table Part 5.

It has to do with where would the fluctuation start based on the last trade. 

In our example BPI's last trade 43.00 we should know if this is a buy or sell transaction. It is important to know because that price will be the start of the fluctuation. So if the 43.00 was a buy transaction the price quote will be 43.00, 42.50, and 42 for the buy side and 43.50, 44.00, and 44.50 for the sell side. If it was a sell then 42.50, 42.00, and 41.50 will be the buy side and 43.00, 43.50, and 44.00 for the sell side.

Also remember that this rule applies every time a new transaction occurs. So if during the trading hours somebody was able to sell then that will be the new basis of the fluctuations. Simple rule yet so helpful in determining how much can you purchase or until what price can you sell your stock during trading hours.

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