TBQ and TSQ are nothing but quantity measures in the stock market. TBQ stands for Total Buy Quantity, or you can also say Total Bid Quantity, and TSQ stands for Total Sell Quantity or Total Offer Quantity.
Now, what TBQ is it’s the total number of available shares that traders can purchase. We can also say Total Buy Quantity or Total Bid Quantity is the total of all open buy orders on the exchange for a stock.
If we take an example, if there are 50 shares to buy for 10 traders, then the Total Buy Quantity (TBQ) is 50
Now let’s talk about TSQ. TSQ is just the opposite of TBQ. Total Sell Quantity or Total Offer Quantity (TSQ) is the total of all present sell orders for a stock on the exchange.
If we take an example, it will look the same as TBQ. If there are 50 shares to buy for 10 traders, then the Total Sell Quantity or Total Offer Quantity (TSQ) is 50.
How do TBQ and TSQ Change?
When the stock’s volatility changes, the number of TBQ and TSQ also changes. TBQs and TSQs are the total supply and demand of the stock. If demand increases and the supply of stock is slow, then the number of TBQ sides will increase, and TSQ will decrease.
As we now know, the fluctuations in the stocks change the number of TBQ and TSQ, and one more thing is the demand for that particular stock decides the total number of TBQ and TSQ.
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Let’s take one example to state how TBQ (Total Buy Quantity) and TSQ (Total Sell Quantity) increases and decreases. If you are trading in a particular stock and that stock price increases, then that means there may be a good demand for a larger quantity of that stock, and this thing leads to the stock price going up, and from this, the sum of TBQ and TSQ is greater than what it was before.
Similarly, if you are trading in stock and the price of that stock decreases, then the demand for that stock also decreases. This leads to the stock going down, and the sum of TBQ and TSQ is less than before.
Let me clear one important thing, most people think that prices are dependent and will go up according to demand and supply, it’s true in most cases, but this is not always true. Prices may not fluctuate mainly because of the demand and supply. It also depends on the stock exchange’s algorithm. So demand and supply are not the only factors on which the price of a stock depends.
Read More: What is QIP in Share Market?
Importance of TBQ and TSQ in the Stock Market
1. Deciding Entry Point In The Stock
If you know when to take an entry into the stock, you can make good money in the stock market. TBQ and TSQ can help you in deciding the entry point in the stock.
2. Helps Traders In Risk Management
TBQ and TSQ are also very helpful in risk management as you can exit from the trade anytime as soon as you know the bad situation of the stock.
For example, if you are trading in stock and that stock’s supply suddenly starts increasing, and its demand starts decreasing simultaneously. Hence, in this situation, it becomes difficult for traders like you to decide when to exit from the trade, so at this point, TBQ and TSQ come into play. It helps traders like you to decide when to exit.
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3. Planning in Long Term Investments in Stocks
TBQ and TSQ are also good at helping long-term investments because TBQ’s and TSQ’s averages are published daily on exchanges, which will help you decide on long-term investments.
So if you want to get involved in long-term investments, then you can take the help of the average of TBQ and TSQ published on a daily basis on exchanges.
4. Intraday Trading
Intraday trading means buying and selling stocks on the same day of trading, so both TBQ and TSQ help to choose the best stocks. This tells how beneficiary traders it is who is involved in intraday trading.
So by this, we come to know Total Buy Quantity and Total Sell Quantity can also assist in determining which stock is suitable for intraday trading.
5. Liquid and Illiquid Stocks
Liquid stocks are those stocks that you can easily sell. Buyers are always available for liquid stocks. Illiquid stocks are those stocks that might take a hard time to find buyers in the official marketplace.
So Total Buy Quantity and Total Sell Quantity help point out the liquid and illiquid stocks. They label the stocks as liquid stock and illiquid stock so that you can easily point them out and choose the best one.
Read More: What is LTP in Stock Market?
We have discussed what is TBQ and TSQ in stock market and its importance. This will help you in your trading journey. If you are a beginner and what to learn more about the stock market, then you can join The Thought Tree. We provide the best stock market course in Jaipur. We have expert faculty members with 8+ years of experience and we also provide mentorship and live trading practice to our students.