I have observed an activity in the buy-sell order book of stocks and I think most of you have also observed it. What I have observed is that, suppose there is a buy order of 1000 shares at rs100 suddenly another order of very small number say 5 shares appears at 100.05 and the same thing happens at the sell side also. This occurs usually when there is a big order at both sides. The large order is never allowed to become the best order. Is it some sort of trading technique or something else?
I have noticed it too. I think it is a program/Algo to ensure that their orders are taken first.
if algos are involved why are they trying to beat the best price with such small quantities.
I do not know the right answer for this. But what i observed is, the order price is the orderdepth immediately changes by 0.05 points when I change my order price. This happens especially when the bid-ask spread is wider ( for eg 10 / 20 ). But when I move my bid/ask price towards ask/bid price ( for eg 10 / 13 ) the automatic 0.05 points do not take effect.