What Is Market Depth

Podcast Duration: 06:31
नमस्कार doston। एंजेल वन के इस podcast में आपका स्वागत है ।

Aap Angel broking ke dusre podcast episodes browse karenge to aapko alpha or beta number per ek podcast milega. Uss podcast ki shuruaat mein humne kahan ki stock market mein koi Terms agar ham literally samjhenge to uska ham galat matlab samajh sakte hain.

On the other hand, kuchh aise terms hote hain jinhen literally samajh ne se unka Sahi matlab nikalta hai. Today's episode is about one such term. That term is market depth.

Jab market depth ki baat hoti hai, tab ye maan ke chalte hai ki koi individual stock ki baat Ho Rahi hai. In rarer cases, we can also talk about the market depth of entire stock indices.

If a stock has a good market depth, then that means ki uss stalk ka demand bhi high hai, aur supply bhi high hai. Therefore, agar koi retail investor ya phir Koi institutional investor ek bada order place karta hai, toh uss stock ke price par jyada fark nahin padega. You can say that market depth gives you insight into the demand and supply forces behind a stock. The deeper a market for a stock, the less volatile it is after investors place volume orders.

Market mein kuch aise stock hote Hain Jo hamesha hi demand mein rehte Hain. Inn stocks ka liquidity bahut high hota hai. Aap jab bhi chahe ye stocks khareed sakte hain. Aur jab bhi chahe ye socks bech sakte Hain. The buyer is assured that he will be able to find a seller, and the seller is assured that he'll be able to find a buyer.

Koi stock ka deep market hona hamen yah bhi bata raha hai ki demand and supply roughly equal hai. Let's ask this question: demand and supply equal hone ka kya matlab hua? Demand aur supply ka roughly equal hone ka matlab hai ki bid-ask spread kam hai. Let's briefly understand what the bid-ask spread is. Buyer bid Karta hai aur seller ask karta hai. If you want to buy a particular stock, you will place a bid in the market. The platform that you are using to buy stocks will execute the trade if the price for the asset reaches the price you entered, or goes lower.

On the other hand, if you are a seller, then you will place an order with an asking price on the market. The platform you’re using will clear your position and sell the stock if a bid price comes that matches your asking price. The platform will also execute the trade if the bid price is higher than the asking price, since no trader in the world will mind making bigger profits. Therefore, ek bid price aur ask price milne se hi order confirm hota hai.

It is possible ki aap jo price mang rahe hai, koi bhi seller Apne stocks uss price mein sell karne ke liye ready nahi hai. On the other hand, it is also possible that as a seller, no bidder is matching your price. In that case, the order will remain incomplete. Bidding price aur selling price ke beech mein jo gap hai, usse bid-ask spread kahate Hain.

Jinn stocks ki liquidity kam hoti hai, unka bid-ask spread jyada hota hai. Buyers ko sellers mushkil se milte Hain, aur sellers ko buyers mushkil se milte Hain. Aur jinn stocks ki liquidity jyada hai, unka bid-ask spread bahut kam hota hai. That means that stock has a lot of buyers and sellers at any given moment, and therefore people will be able to purchase the stock as well as clear their positions with relative ease.

Now let's go back to our discussion about market depth. You may remember that we said the more liquid a stock is, the more market depth it will have. Therefore, market depth and the bid-ask spread are inversely correlated. Jitna market depth jyada hoga, utna hi bid-ask spread kam hoga. On the other hand, jitna market depth kam hoga, utna bid-ask spread jyada hoga.

When using Angel broking’s smooth mobile app, you will be able to see that you can place two types of orders. Inn do tariko se aap stocks buy bhi kar sakte hai aur sell bhi. Agar koi stock ka market deep hai, to aap market order place kar sakte hain.

Since the stocks market is Deep and its bid-ask spread is very small, your order will be accepted very soon. However, if the market for a particular stock is narrow and the bid-ask spread is big, then you can place a limit order. Market order mein aap market price par stock khareed sakte hain ya phir bech sakte Hain. Agar koi stock ka bid-ask spread zyada hai, to possible hai ki aapko apna preferred buying price yah preferred selling price nahin mile. By placing a limit order, you can ensure that your order only goes through if the preferable price is obtained.

It is important to keep in mind that the brokerage fees of market orders is much smaller than the brokerage fee of limit orders.

Therefore, limit order main aapko apna ideal price to mil sakta hai, per kafi jyada brokerage fees bhi lag sakti hai.

Market depth is more of use to short term traders than long term traders. Agar aap intraday trader hai, to aapko bilkul market depth dekhna chahie. Par agar aap value investor hai, and if you plan to stay invested in that stock for years to come, then the current relationship between the demand and supply of the stock is not that relevant. Having said that, it cannot hurt to understand how the stock is trading in the market at the moment, and market depth lets you do exactly that.

चलिए, एंजेल वन की तरफ से आपको आज के अलविदा. ये podcast शेयर करना ना भूलियेगा - याद रखियेगा की ज्ञान बाटने से बढ़ता है । और फिर अंत में तोह financial markets एक ऐसी university है जिसमे कोई professor नहीं, सब students ही है ।