Why can they buy at 12.51 but not at 12.59? and the size of the ask is 300
Hi! This is a hard question and we get a lot of messages about this one.
The key concept here is that the market maker takes the customer’s order. To give a simple example:
MM quotes 100 x 200, 3 x 4
- The MM will buy up to 300 shares at a max price of 100 each
- The MM will sell up to 400 shares at a min price of 200 each
The customer’s orders are reversed:
- The customer can sell up to 300 shares at a max price of 100 each
- The customer can buy up to 400 shares at a min price of 200 each
Hope this clears it up!