Why is the spread so large for non-Nifty 50 shares or futures?

kingsmasher1

Well-Known Member
#1
I generally preferred Nifty50 stocks/futures for any trade.
I have observed that the spread is generally huge (more than 50 paise at times) for non-Nifty stocks/futures.

What is the reason? Or am i missing something? Please see screenshot below (for a Nifty50 future versus non-Nifty50 future)

 
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kingsmasher1

Well-Known Member
#3
Reason is less volatility,less numbers of buyers.When FII/DII buy those scrips you can see spread is hardly 5-20 paisa.
I thought so, but then the volume traded for Sunpharma is around 8 lakhs, and Bata is around 7lakhs (the stock), so not much difference, and for futures it is 21 lakhs for BataIndia, and only 17lakhs for Sunpharma
 
#4
I thought so, but then the volume traded for Sunpharma is around 8 lakhs, and Bata is around 7lakhs (the stock), so not much difference, and for futures it is 21 lakhs for BataIndia, and only 17lakhs for Sunpharma
Hi,
Do you know how SL-M orders work?If you know that then you'd understand this spread thing also.
Say,you placed SL-M buy order @ 571,what price it'd get filled?
=Once the price breaches 571,the order is being sent in Market.
But,if there's no seller around 571.50,(withing 50 paisa range)What will happen?
And sellers are available at only 572.10,572.50,572.75,573..............?

=Then your order will get filled between 572.10-572.50 though you have placed an order at 571.

So,at that particular time,there should be buyers/sellers at that price,else you'd see order jump.

On a chart you could see price spikes happenning.Say orders are at prices 1,2,3,4,8.Here,upto 1-4 you see a normal candle forming and suddenly it fills order at 8 and shrinks.There's no buyers-sellers between 4-8.But whoever placed order at 4,they got filled at 8 and candle shrink.

Hope I tried to clarify your doubt.
 

kingsmasher1

Well-Known Member
#5
Hi,
Do you know how SL-M orders work?If you know that then you'd understand this spread thing also.
Say,you placed SL-M buy order @ 571,what price it'd get filled?
=Once the price breaches 571,the order is being sent in Market.
But,if there's no seller around 571.50,(withing 50 paisa range)What will happen?
And sellers are available at only 572.10,572.50,572.75,573..............?

=Then your order will get filled between 572.10-572.50 though you have placed an order at 571.

So,at that particular time,there should be buyers/sellers at that price,else you'd see order jump.

On a chart you could see price spikes happenning.Say orders are at prices 1,2,3,4,8.Here,upto 1-4 you see a normal candle forming and suddenly it fills order at 8 and shrinks.There's no buyers-sellers between 4-8.But whoever placed order at 4,they got filled at 8 and candle shrink.

Hope I tried to clarify your doubt.
I dont think we are on the same page, i haven't asked the definition of "what is a spread, i am well aware of that, i asked why there is a huge spread between non nifty and nifty stocks or futures.

And next what you told above is really not a SL-M but a stop market order. There is a huge difference between stop-market and a SL-M.
 
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#6
I dont think we are on the same page, i haven't asked the definition of "what is a spread, i am well aware of that, i asked why there is a huge spread between non nifty and nifty stocks or futures.
Hello King,We are on the same page.I answered your query with an example.
Spread happen even with Nifty Stocks/Fut and even with Nifty itself.
If you see ITM or Deep ITM Nifty Options,there also you could see it,but in ATM/ITM Nifty options there is hardly a difference of 1-2 point.

And next what you told above is really not a SL-M but a stop market order. There is a huge difference between stop-market and a SL-M.
stop market order=stop loss market order=SL-M order.

If you re-read the example you could understand why spread happen,why order jump and why you see a price spike on a chart.
(all are connected with each other).

As you know all these basics already,hope you know how to get a best fill when there's a big spread.

Happy Weekend.
 

kingsmasher1

Well-Known Member
#7
stop market order=stop loss market order=SL-M order.


Happy Weekend.
Mere bhai, i appreciate you responding to my thread. But the above is little incorrect.

Stop Market Order: Also, called sell-stop or buy stop order.
You wish to short sell a stock currently trading at 105 when price falls to say, 98Rs, as you believe the price can fall more, if it crosses this support. You place a sell-stop-market order at 98 in this case.

SL-M: You have already shorted at 98Rs, and you think, if it crosses 100/- you wish to exit with max 2Rs loss, at whatever the best market price available then. You place a SL-M at 100/-

Happy Weekend to you too, and happy trading :)
 

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