What is the difference between bid and ask prices?

The bid price is the highest amount of money a buyer is willing to pay for a particular commodity. In contrast to the selling price or the asking price, it is the amount that a seller is willing to sell a security for. Investors are required by a market order to buy at the current Ask price and sell at the current bid price.

What is the bid price?

The bid price refers to the highest price a buyer will pay for a security. The ask price refers to the lowest price a seller will accept for a security. The difference between these two prices is known as the spread; the smaller the spread, the greater the liquidity of the given security.

What is the ask price?

The ask price represents the minimum price that a seller is willing to take for that same security. A trade or transaction occurs when a buyer in the market is willing to pay the best offer available—or is willing to sell at the highest bid. The difference between bid and ask prices, or the spread, is a key indicator of the liquidity of the asset.