WHAT IS BID AND ASK?
In the CRYPTO market, bid and ask are prices that indicate the highest price a buyer is willing to pay and the lowest price a sellers is willing to accept for a stock or security:
Bid: The highest price a buyer is willing to pay for a stock
Ask: The lowest price a seller is willing to accept for a stock
Bid-ask spread: The difference between the bid and ask prices
A successful trade occurs when a buyer purchases at the ask price or a seller sells at the bid price.
The bid-ask spread is a transaction cost that goes to the market maker, who profits by buying at the bid price and selling at the ask price. The bid-ask spread indicates the stock's liquidity.
In highly liquid markets, the spread is minimal, while thinly traded markets have significant gaps.
Market makers adjust their bid and ask prices based on factors such as market conditions, volatility, and inventory levels. You can find the current bid and ask prices for a stock on a trading platform provided by your stockbroker.