Quick Question Gents ?

[number2allover]

Hi ,

I'm 3 months in and improving my trades ! More so on the emotional side.

Can I ask a stupid question ?? I've fried enough brain cells thinking about it but I need guidance.

The market matches layers and backers at whatever price they match, so for example a back of 10 is matched with a lay of 10.

I know the 10 on the lay side has whatever liability.

Question :

If half any traded price is back money and the other half is lay , what makes the price go up and down ?

If I am correct is the answer if say, if this was the only money in the market, at price 2.50 is blank (blue on reverse ladder) and I place a back order of 100, if on the pink side their is 20 at each of 2.48/2.46/2.44/2.42/2.40 , does my order swallow each 20, effectively moving the price down to 2.40 ?

I'm a very visual learner so with the vast volume of trades and movement on the ladder I'm getting lost.

Thanks for your time ,

Number2allover

[ShaunWhite]

If I am correct is the answer if say, if this was the only money in the market, at price 2.50 is blank (blue on reverse ladder) and I place a back order of 100, if on the pink side their is 20 at each of 2.48/2.46/2.44/2.42/2.40 , does my order swallow each 20, effectively moving the price down to 2.40 ?

Yes. If you'd put your £100 back in at 2.4 you'd take all the money down to 2.4. But if you'd asked for 2.48 then you'd take the £20 at 2.48 and your remaining 80 would sit there as unmatched at 2.48, waiting for someone to accept your offer (ie they'd lay your 80 at 2.48 back bet )

Price movement is all about supply and demand, if more people want to buy than want to sell (or visa versa), then the price moves. And prices stop moving when the buyers/sellers are no longer happy to pay the price on offer.