Futionary: Bid and Offer

October 6, 2014 9:04AM CDT

One of the most common confusion for new traders is how to place a limit order when you want to get filled right away but you do not want to place a MARKET order. Before placing an order, you want to ask for the BID and the OFFER. The Bid is where the market is willing to sell you something and offers are where the market is willing to let you buy.

For example: You are looking to buy the December Emini S&P. You want to buy it at current levels but you do not want to place a market order before knowing where the market may Fill you. You check your order entry platform or call your broker and find out that the last price traded was 1900.00, but the BID is at 1900.00 and the Offer is at 1901.00. If you place a Market order to buy, you will be filled at the offer of 1901.00. If you place an order to sell, you will be filled at the bid of 1900.00. If you want to try and get a better price, or have the Order work for a while, you can place an order at a price between the bid or the offer or outside of those parameters.

The most important thing to remember is that when placing your order “at the market”, you will always get the offer on your buy order and you will always get the bid on your sell order. Many traders look at the last price traded and think that Is where they will be filled. But it is the LAST price traded. You need to know where the market is at all times before you place your order. For more information about order placement and other “Futionary” terms you may have seen from me, do not hesitate to give me a call at 888-861-1584. Best wishes & good trading!


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This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.