Thursday, June 13, 2024

Active Buy/ Sell Orders

 Active Buy/ Sell Orders

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Active buy order means a buyer actively buy stocks at the then sell price; and active sell order means a seller actively sells stocks at the then buy price. If letter “A” appears on the stock ticker, a stock is under active buy order “A Order”; if letter “B” shows, a stock is under active sell order “B Order”

At time of rising share price and more active buy orders, more investors tend to be bullish on the stock and are willing to actively buy such stock at a higher price; at time of falling price and more active buy orders, investors tend to bottom fish, and hence such stock is seen to have stronger undertaking capability which is positive to after market. In contrast, in case of more active sell orders, especially when the share price falls, there may be panic selling in the market.

The initiative of both buyers and sellers can be analyzed through the size and proportion of the active buy and sell orders. Such analysis can be one of the methods to gauge the trend of large investors given their stronger capital. Yet, there are certain limitations of leveraging active buy and sell orders to analyze stock trend. Investors are advised to combine other indicators for judgment on the related market condition along with active buy and sell orders, in order to arrive effective and comprehensive judgment.

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