Ask and Bid Price of a Stock

Ask and Bid Price of a Stock

Ask and Bid Price of a Stock

Learning to read the ask and bid price of a stock is one of the most basic, yet an essential, part of stock trading. If you can not understand the ask and bid price of a stock, you will not be able to trade. You will not be able to trade because the ask and bid prices are the price that a buyer is willing to buy at and the price a seller is willing to sell at.

The Bid is the price that a buyer is willing to buy shares at.

The Ask is the price that a seller is willing to sell shares at.

When you look at your broker's trading platform, you will see it has the Size next to the ask and bid prices. If the platform read "2.35/5000" on the Bid price, it would mean that there are 5000 shares that are willing to be bought at the price of $2.35 per share.

You would read the Ask price the same. If the platform read "2.37/10000" on the Ask price, it would mean that there are 10000 shares willing to be sold at the price of $2.37 per share.

The bid and ask prices are constantly changing throughout the day for most stocks. A time that a stock's bid and ask price would not change is when no shares have been traded. Since no shares have been traded, the bid and ask price can not change unless a buyer is willing to put in a order that is higher than the current bid price that is displayed. But most stocks that trade on the NASDAQ or the NYSE will have their bid and ask prices constantly changing throughout the day. If you can read the bid and ask prices that your broker displays, then you are well on your way to becoming a stock trader.

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