Understanding Stock Prices: Bid,Ask and Spread

Understanding Stock Prices: Bid, Ask and Spread. 

Hello Friends, If you are a online Stock Trader or an Investor. 

While placing buy or sell order in your Trading Platform, you have shown Bid and Ask price in Market Depth. 

Did you know what are those prices?

If not . Then 

This is the right place to know about it.

What is Bid and Ask price ?

#1.Bid Price:

Bid Price is a price at which a buyer which is available to buy shares. 

If you sell any shares at market price it will be sold at bid price. 

For example, if current market bid price is ₹120.5 and you have placed a market sell order of some shares .Your shares will be sold at ₹120.5 .

#2.Ask Price: 

Ask Price is a price which a seller asking for his or her shares. 

When you place buy order to buy some shares at market price, you will get those shares at Ask price. 

For example, If Ask price for any Stock is ₹121 and you have placed a market order to buy some shares you will get those shares at ₹121.

Ask price will always be higher than Bid price .

#3.Spread :

Spread is the price difference between Bid price and Ask price. 

For example, If a stock has Bid Price is ₹120.50 and Ask price is ₹121 then spread would be 

Spread = Ask Price - Bid Price
       = ₹(121-120.5) 
       = ₹0.5

That was the all thing about Bid, Ask and Spread in Stock Trading or Investing. 

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