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Offer and demand or BID ASKThe 2 main forces in the markets are offer and demand or BID ASK. The offer represents the ASK and the demand represents the supply or the BID. It is basically a very simple concept. But many new traders are irritated by it. There are two ways to trade stocks based on bids and offers: - Passive: Passive buying Passive buying means that you are trying to buy a stock at a price that is lower than the current best ask price. Therefore your order cannot be executed immediately (since you are not agreeing to the seller’s price) and gets displayed on the bid side of the level 2.Passive buying means to place a bid and to wait for a seller to sell you his stocks. Passive selling When selling passively you are trying to sell a stock at a higher price than the current bid price. Your order won’t be executed immediately and gets displayed on level 2. Passive selling means to place an offer (ask) and to wait for a buyer to buy shares from you. There is no way to ensure that your order gets executed when trading passively, since there might be no one willing to agree to your price. - Active: Active buying Active buying means to buy shares from an existing seller who has an offer in the market. You are agreeing to someone else’s price offer. Active selling Active selling means to sell shares to an existing buyer who has a bid in the market. When trading actively you are most likely to get your order filled immediately, unless someone else steps in front of you. Remember that you can only get filled for as many shares as the counter-part is willing to trade. Therefore you might get partial fills. What this naturally brings us to is the infamous Level 2 so click here for an introduction to the LEVEL 2 
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