Stock Exchange: Bid, Ask and Spread

On the stock market we differ between the bid-price (bid) and the ask-price (ask). The difference between these two values is called the spread.

Bid

Bid is the market value or price, a buyer is willing to pay for the paper on the market. Therefore, there are buying orders of this price on the market.

Ask

The ask price or ask is the opposite of the bid. The ask is the market value or price, a seller wants to get for the paper on the market. Therefore, there are selling orders of this price on the market.

Bid, Ask and Spread

The ask price is usually higher than the bid price. This means that the selling price in the market is higher than the purchase price. This is because the seller wants to sell his paper more expensive than he has bought it. This difference between bid and ask is called the spread.