BID and ASK

Honky was astounded when we had a look at the current price of Infy share.This is what honky was to look at

Currency : Rupees
Code : 500209
View Chart
Price
2,368.25
Day High
2,375.00
Bid
2,360.10
Day Low
2,333.00
Offer
2,368.00
52 Week High
2,401.00
Change On Day
9.50
52 Week Low
1,225.00
Percentage Change
0.40%
Last Trade
08-02-2007 4:02PM
Opening Price
2,360.00
Daily Volume
92,789
Prev. Closing
2,358.75


Though there were too many numbers to muddle him he could winnow that the price is somewhere in 2300s..Isnt Bonky?

Meanwhile bonky was also free for a while after he a peer review.
“Exactly honky! Today infy sells around 2300, my Dad got it for 300Rs and imagine that has almost grown eight times in a period of 15 years”
“Wow” said Honky with a wide grin.
“Beware at the same time you are not devoid of risks “ warned Bonky.
The grin in his face now turned to a grimace,Notifying it Bonky added “All you can lose is all what you have invested but the gains have no limits”.

“Bonky who is supposed to give price for the shares” wondered Honky.

“Common yaar!! No one can even predict its price!Its just a marked where you go out offer your share for the highest possible price.It works on the same bid auction method you would have come across in your vegetable markets”.

“Oh..How is that possible !”

“Havent you heard that the world is flat now!! Everything is digitized and the network of computers does the trick for you.It consolidates all the bids and gives you the highest bid and the lowest ask price”

“Bids and ask!!!” interrupted the little boy.

“I am here to service all your interrupt routines” continued Bonky “Bid is the price which a buyer would like to give away to fetch a stock and ask is the price for which the seller would be happy to sell his stock at the current time”.

“Oh! That’s clear now! When I need to buy a stock I need to watch the BID and after doing that my eyes should be on Ask .Am I right??”

“That’s it my boy”

“Bonky!!But still I am confused..Who is it monitoring the trade?Are there any contractors as shown in “GURU”!!”

“No Honky no single contractors!!but there are many!! They are called market makers. Hope you would have heard them by the name brokers!”

“Ya Bonky..Brokers and brokerage!!Whats that” shouted honky in a bewildered tone.

“Honky seems you are so much enthusiastic!! It seems you might start piling up shares as soon as I leave you now!! That’s not that simple..Let me continue this later,For now get back to your work”

Honky went back to his seat and screamed that he had earned 5000 by just holding some 50000 worth of share for a dayJ

PS:Wondering how come honky earned that much? And how else I could hold Intel shares??? Go and check out investopedia.com.Answers are there in their stock market simulator.