A typical retail trader (a regular person just making a few transactions here and there on their lunch break) will likely follow a stock by looking at the price posted on mainstream stock-tracking websites, making any investment decisions from there. Professional traders go a little deeper.
Behind a stock's price, there's an intricate auction system of bid and ask. Bids represent orders to buy a stock and asks represent orders to sell (See: Bid and Asked). Tracking a bid tick means tracking the order flow on the bid side of the equation. Each bid tick indicates the movement in the bid price, whether moving higher or lower or holding steady.
A savvy trader can read the trend in the bid tick to garner micro advantages in the stock's movement. These kinds of additional benefits don't mean much for any particular trades (so aren't worth tracking for once-in-a-while types), but the additional value can add up over time if the trader is working in a high-volume environment.
Related or Semi-related Video
Finance: What Is a Basis Point?124 Views
finance a la shmoop what is a basis point?
well one percentage point is a hundred basis points, half a percentage is 50
basis points, five percentage points is? yeah we're gonna make you do that one on [frowning man talks to camera]
your own. well the basic idea is that in very large financial transactions those
involved need highly granular computation grids, and basis points
divid interest rates much more tightly. if a company borrows three billion
dollars just noting that the rate is four percent is really vague. it would
need to be noted as four point zero zero percent. why? because just one basis point [equation on screen]
i.e. one hundredth of a percent per year on three billion dollars borrowed
is still a lot of money. that is one basis point on three billion bucks is
300 grand .so basis points are a real thing in high finance transactions and [smiling man talk to camera]
okay okay the answer is 500 basis points. yeah all right now you can go back to
spinning this thingy. [man spins fidget spinner]
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