How do hidden orders affect bid/ask prices?

I am little confused on basic bid-ask concepts.

Let's suppose I have a BUY order i.e I want to buy shares.

I can either place the order at BID price, lower than BID price or higher than bid price.

Now I know, if I place it Display-Higher than bid, I will raise the bid price. If I place it at Bid, I will raise Bid Size. If I place it at lower than bid then what will happen?

Finally, I am confused on how will hidden orders affect the bid price? Will Hidden, Higher than the bid/at Bid /lower than bid affect the Bid price?

Submitted September 17, 2016 at 08:21PM by newbiealgotrade

One thought on “How do hidden orders affect bid/ask prices?”

  1. If you place an order lower than bid it will not change the bid price.
    If you place at bid it will not change the bid.
    If you place higher than bid:
    – Lower than lowest ask –> you will raise the bid
    – Higher than lowest ask –> your order will be fulfilled and market makers may or may not raise their bid price in order to keep the market liquid.

    Hidden orders should not affect bid or ask prices since they are hidden but sellers may not be willing to trade with you.


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