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What is the difference between bid and ask price?

By definition, the ask price will always be higher than the bid one. The numerical difference between the bid and ask is called the bid-ask price spread. The bid-ask spread is simply the difference between the highest price being offered for an asset (bid) and the lowest price it is being sold for.

What is a bid ask spread?

A bid-ask spread is the difference between the highest price that a buyer is willing to pay for an asset and the lowest price that a seller is willing to accept. The spread is the transaction cost. Price takers buy at the ask price and sell at the bid price, but the market maker buys at the bid price and sells at the ask price.

Why should you use bids and asks?

Using bids and asks cleverly allows you to potentially buy at a discount or sell at a premium. You need not settle for the market price but can lie in wait for the opportunity you see. Your orders stand as a testimony to the value you perceive, for the market to validate — or not.

What happens if bid volume is higher than ask volume?

When the bid volume is higher than the ask volume, theselling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down. You've got it backwards.

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