Tick Size

Contrary to popular belief, size does matter. Well, in this instance we're referring to a security’s share size, not...well, you know.

Size refers to the number of shares for which a quote is valid. For example, if a stock is quoted at 69 to 70, 6 by 8, the size of the bid is 600 shares and the size of the offer is 800 shares. The bid size is the amount of a security that an investor is willing to buy at a specific price. The ask is just the opposite: how much an investor is willing to sell.

Savvy investors analyze this bid and ask size relationship in an effort to maximize buying or selling opportunities for certain securities. A substantially different bid ask size spread represents a supply-and-demand imbalance, potentially influencing the direction of those security prices up or down.

Huh? What the...?

In layman’s terms, size matters. And if you’re a savvy investor who enjoys analyzing length and width, er, size and spread, then you have the potential to make lots of cold, hard moolah.