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What is a bid and ask price?

Bid and ask (also known as "bid and offer") is a two-way price quotation representing the highest price a buyer will pay for a security and the lowest price a seller will take for it. The difference between bid and ask prices, or the spread, is a key indicator of the liquidity of the asset.

Can a buyer bid a higher amount than the ask price?

More than one buyer can bid a higher amount than the bid price. Sellers can’t quote lower than the ask price, as the order will simply execute at the lowest possible price. The bid price is known in the market as the ‘sellers’ rate’. That’s because if a trader sells as stock, they will get the latest available bid price.

What is a bid price?

The bid price is the price that an investor is willing to pay for the security. For example, if an investor wanted to sell a stock, he or she would need to determine how much someone is willing to pay for it. This can be done by looking at the bid price. It represents the highest price that someone is willing to pay for the stock.

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