What is a bid and ask?

The term "bid and ask" (also known as "bid and offer") refers to a two-way price quotation that indicates the best potential price at which a security can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share of stock or other security.

What is a bid price?

A bid price is a price for which somebody is willing to buy something, whether it be a security, asset, commodity, service, or contract. It is colloquially known as a “bid” in many markets and jurisdictions. Generally, a bid is lower than an offered price, or “ask” price, which is the price at which people are willing to sell.

What is the difference between bid rate and ask rate?

This rate is usually always higher than the current price. This rate is usually lower than the current price. Sellers use Bid rate. It is always lower than the Ask Price. It is always higher than the bid rate. A bid of ₹15 x 120 means that the potential buyers are bidding at ₹15 for up to 120 shares.

What is the difference between asking price and bid-ask spread?

The asking price is always higher than the bid price, and the difference between them is called the spread. Different types of markets use other conventions for the spread. It reflects transaction costs and also liquidity. Bid-Ask Spreads increase in a volatile market or when the direction of the price is uncertain.