Why are the bid and offer prices quoted different between the London Stock Exchange and Yahoo web pages?
We are continually finding that the difference between the bid and offer prices on the Yahoo finance pages are much closer than on the London Stock Exchange official page. As an example, the bid price for SWB.L on Yahoo is 84.75 and the offer price is 85.25. However, on the official LSE page the price difference is always much greater: bid price in this case is 70 and the offer price 100! Could somebody please explain what is going on here?
Answers:
The bid/offer prices are very volatile, a floor broker may want to
sell at 70 but he will offer at 100 in order attract a bid which is as
near as possible to his sell order. The same happens with the bid
which is as low as possible in an attempt to bring the seller‘s
sale price down. The order will be repeated until both meet and
the deal is done. Usually, most on screen quotes take a few
minutes to be posted and can vary depending on the efficiency
of the posting operator. Yahoo, like all other services, have a
certain delay time before posting these bids. I suppose this may
be the reason. You will only get a quick posting when a "direct"
deal is executed. Also there are runners whose duty is to take
a signed deal from buyer/seller or vice-versa which seals the
business. The runner has a given time (in NYME 5 minutes) to
deliver the signed deal. This may vary from one exchange to
another, but when there are many orders being closed at the
same time, this period is extended and a fast light is switched
on by the exchange manager. Things have changed and now
it is all wired quotes but still, an operator has to type the info
into his computer for the numbers to appear on screen. This
will vary slightly from one service to another. Bloomberg seem
to be the best and have taken over the lead from Reuters.
I suspect that you're not comparing the same security. Are you sure that it may be different security of the same company - a warrant or something like that.
The bid-offer spread that you quote from the LSE is huge!
I suspect the LSE page is incorrect. That spread is far too wide.
Try emailing them to suggest there might be a problem.
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Answers:
The bid/offer prices are very volatile, a floor broker may want to
sell at 70 but he will offer at 100 in order attract a bid which is as
near as possible to his sell order. The same happens with the bid
which is as low as possible in an attempt to bring the seller‘s
sale price down. The order will be repeated until both meet and
the deal is done. Usually, most on screen quotes take a few
minutes to be posted and can vary depending on the efficiency
of the posting operator. Yahoo, like all other services, have a
certain delay time before posting these bids. I suppose this may
be the reason. You will only get a quick posting when a "direct"
deal is executed. Also there are runners whose duty is to take
a signed deal from buyer/seller or vice-versa which seals the
business. The runner has a given time (in NYME 5 minutes) to
deliver the signed deal. This may vary from one exchange to
another, but when there are many orders being closed at the
same time, this period is extended and a fast light is switched
on by the exchange manager. Things have changed and now
it is all wired quotes but still, an operator has to type the info
into his computer for the numbers to appear on screen. This
will vary slightly from one service to another. Bloomberg seem
to be the best and have taken over the lead from Reuters.
I suspect that you're not comparing the same security. Are you sure that it may be different security of the same company - a warrant or something like that.
The bid-offer spread that you quote from the LSE is huge!
I suspect the LSE page is incorrect. That spread is far too wide.
Try emailing them to suggest there might be a problem.
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