Finance & Investment

Learn Finance: Bid Price, Ask Price and Bid-Ask Spread.

Bid Price: This is the price that a buyer is willing to pay for a security/asset. In cases where there are several bid prices, the bid price would be taken as the highest price that the bidder is willing to pay.

Ask Price: This is also known as offer price. It is the price that a seller of a particular security/asset is willing to accept in exchange of a security. This price is usually higher than the bid price. In cases where there are several prices, the ask price would be taken as the lowest price the seller would be willing to sell.

Bid – Ask Spread: This is the differential amount between the bid price and the ask price of a security. In cases where there are various prices, it is usually taken as the difference between the lowest ask price and highest bid price for that security.

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