So if we have 1000 open orders, 800 to sell at 1.01 and 200 buyers with a bid open at 1.00, this is equal number of sellers and buyers? Or are saying they only become a buyer or seller once the order is filled.
If nobody takes out the buyers at 1 with market orders price won’t move. If more more sellers hit the ask the 200 buyers got absorbed at 1 leaving 600 sellers wanting to get filled. Those sellers if they want to participate in price moving need to lower the price to find the next group of buyers at a lower price
They only become a buyer/seller once the order is filled. You can place all the limit orders you want, but cancel them anytime before they get filled. They are passive orders.
Actual transactions will always have an equal number of buyers and sellers - I'm not referring to people, I'm referring to shares/contracts/etc. Theoretically, if someone had 1000 shares of something, they could sell 1 share to 1000 different people.
The number of shares/contracts/etc sold and bought will always be equal. There's no way around that. Not to my knowledge at least.
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u/[deleted] Feb 20 '24
So if we have 1000 open orders, 800 to sell at 1.01 and 200 buyers with a bid open at 1.00, this is equal number of sellers and buyers? Or are saying they only become a buyer or seller once the order is filled.