Let us suppose I have 1 Million US Dollars, and I am given an ask value of 0.45 USD per share in a given share. Let us call it MRD3. If I place an order of the type bid, in which I offer only 0.01 USD per MRD3 share, generating a large order, how would this scenario change the order book dynamics?
I hope my question is clear. I was thinking about this the whole week.
Thank you for thinking about this theoretical (maybe nonsensical) problem with me.
I want to make it a bit more clear. In general, it is believed that if we have more buyers than sellers, the price will rise and the same for a lot of sellers--if we have more sellers than buyers, the price will fall. This general understanding, unfortunately, is too simplistic. With my question, I am trying to understand the dynamics of the order book and Spoofing in Financial Markets. In my example, even with more shares wanted than offered in a given price range, the price of the share itself is not likely to fall. Yet, I am a bit interested in knowing about your thoughts on this.
I am researching order book as a subject. I do not have any intention of manipulating the order book, but I have the intention of doing a PhD in Economics.