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The Order Book
The columns are made up as follows.
The left hand column, in this case starting with 9,661 @1746 is the best price 'published' on the buy side by a broker. It shows that a buyer wishes to acquire 9,661 shares at 1746p. Below him are other buyers wishing to buy different quantities at a lower price.
The right hand column, in this case starting with 40,000 @1747 is the best price 'published' on the sell side by a broker. It shows that a seller wishes to sell 40,000 shares at 1747p. Below him are other sellers wishing to sell different quantities at a higher price.
If you were a buyer you have 2 options. Either buy from the existing price screen at 1747, and match up with the published sellers in a quantity of 62,482 or less, or publish your own price on the left hand column hoping that a seller will match up with you.
If you were a seller again you have 2 options. Either sell to the existing price screen at 1746, and match up with the published buyers in a quantity of up to 9,661 or less, or publish your own price on the right hand column hoping that a buyer will match up with you.
The two columns are constantly changing as either a posted trade gets matched or indeed when someone posts up a new trade.
So what will change the yellow strip? The Yellow strip is just the best prices from each column displayed and is the price you will see on Level 1 screen (bid/offer). As the top price in each column changes so does the yellow strip price. So, say a seller came in and sold over 9,661 shares at 1746 to the advertised buyers, that price would disappear from the screen and the next price would move to the top (25,000 at 1745), which would mean that the Bid/Offer would now show 1745 - 1747.
The other way the Bid /offer can change is when someone post a new best price. It might be the case that a buyer comes in and publishes a price of 1747 in the left column. If this is the case then the bid/offer becomes 1747/1747. Likewise the same applies if trades are filled or new ones entered on the right hand column Because of the volume of shares traded in FTSE 100/250 stocks you can now see why the prices move so much within a day.
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