Bid and Ask Price Explained: What They Mean and How the Spread Works
In any trading app, an asset has two prices, not one. Here's what bid and ask mean and why they decide how much you pay for a trade.
What it is
Bid is the best price someone is willing to buy at right now. Ask is the best price someone is willing to sell at. The ask is always higher than the bid, and the difference between them is the spread.
| Price | What it means for you | |
|---|---|---|
| Bid | 99.90 | You can sell instantly at this price |
| Ask | 100.10 | You can buy instantly at this price |
| Spread | 0.20 | Your “loss” on entry |
How it works
A market buy order fills at the ask, and a market sell order fills at the bid. If you buy and immediately sell, you lose the spread. All orders are visible in the order book: sellers on top, buyers below.
To avoid overpaying, use a limit order — see our article on limit vs. market orders for details.
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- Bid is the buyers' price, ask is the sellers' price.
- You can buy instantly at the ask and sell at the bid.
- The difference is the spread, and it's narrow for liquid assets.
Frequently asked questions
What price is the chart based on?
Usually the last traded price or the bid. That's why the price on the chart can differ slightly from the price you'll actually buy at.
Why does the spread sometimes widen sharply?
At night, before news releases and in illiquid assets, there are few orders. Buyers and sellers step back, and the gap between the bid and the ask grows.
How do I find the bid and ask?
They're shown in the order window and in the order book: the best buy price and the best sell price.
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