Price is different for shorts and longs

Hey guys,

I have noticed that for the stock based upon the type of transaction, the sell price is different. here are the transactions:

The sell price for halford for a long transaction is 1.6706 and for a short transaction is 1.7117. I cannot attach the screenshot as I am a new user but happy to provide more details

this is super annoying as this makes it very unpredictable and feels deceiving. also doesnot let the strategies run properly and screws all calculations

@Avi There are two types of prices - SELL (BID) & BUY (ASK).

When you have a BUY position, you have to look at the SELL price, because that’s what you can sell your shares for. However, when you have a SELL position, then the BUY price becomes relevant because you need to purchase back the share.

There is always a difference between the BUY & SELL price called the spread.

You can check this post to learn how short selling works & why you have to look at the BUY price, not chart price (which is SELL).

Thanks David. I am noob, so still learning the art :slight_smile: . Follow up question - why do the spread (difference between sell and buy price) keeps varying. the sell price changes at a faster rate than the buy price. this does not help in leveraging the volatility of the market at times.

not sure what this means nickspacemonkey.

It was a poor attempt at a joke that I decided not to post lol. Don’t worry it was just a guy saying spread over and over.

all jokes are good, keep them coming :slight_smile:

@David tagging you here if you can help the variable spread and how it works

@Avi The spread is just the difference between BUY & SELL. These two prices can move independently (although only slightly) from time to time. Both prices depend on liquidity & supply/demand. Usually, the more trading volume there is, the tighter the spread.