The Bid/Ask Spread, and How it Costs Investors

Think of an auction. The "bid" is the price closest to the last transaction that buyers are willing to buy at. The "ask" is the price closest to the last transaction that sellers are willing to sell at.

You can also think of them as the market price of a stock--bid being the market price if you are selling "at the market" and ask being the price if you are buying at the market. The difference between the bid price and the ask price is called the "spread. Generally, you will only see what does bid and ask mean in the stock market and ask prices quoted for NASDAQ renko forex trading strategy. The NYSE and other listed exchanges ASE, Midwest, Boston, Pacific etc.

In general, a larger ask size than bid size means that at the moment, there are more sellers than buyers and thus downward pressure on the stock's price. This could change in an instant though, so it isn't that helpful unless you're a market maker or very sophisticated trader.

investing - Can someone explain a stock's "bid" vs. "ask" price relative to "current" price? - Personal Finance & Money Stack Exchange

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