When buying stocks or precious metals what's the difference between bid and ask?

Question

When buying stocks or precious metals what's the difference between bid and ask?

Answer 1

bid is the price that is used to sell stocks

ask is the price that is used to buy stocks

tips to memorize : always buy with higher price ( ask price ).

Answer 2

Ask price is how much you have to pay to get it plus a fee. Bid is how much people are offering for it.

The spread is the difference between the two.

Answer 3

The prices are put up by Market Makers (market driven) or by orders put in the system by 'traders' (order driven) So the Bid and Ask are prices being offered or displayed by another party. So the bid is what someone would pay you to buy your shares and the Ask is what someone would sell the shares to you.

If you are buying shares you could put your order in on the Bid price as a limit. Likewise a sell order on the Ask as a limit. Ask is also called the Offer.The Level 2 price is the best Bid and Ask from all participants and is called the 'Touch' (in UK anyway) and the middle price of the touch is called the Middle. The Level2 prices are constrained by 'size'. So the Bid & Ask may be different outside the quoted size.

Answer 4

The bid is what is offered by a potential buyer.  The ask is what is requested by a potential seller.

If you place a market order, it will match to an "ask" price and your order is filled.  If you place a limit order, your stated limit offering price will become a "bid".  When a seller is willing to sell at market price, their order will be matched with your limit bid and their order is filled.

When a stock is moving fast, and there is no "spread" between the bid and ask, getting a market order in the system may or not be the best option, depending on various conditions at the time.

When a stock has a wide spread between bid and ask, placing market orders is most often going to lead to your paying more for a stock than you needed to to acquire it.  

Answer 5

BID: The price you might get when you sell.

ASK: The price you may pay when you buy.

SPREAD: The difference between the Bid and Ask. (The price the market market gets paid for making a market.)