What is Bid and Ask in stock trading and what does the broker's spread mean?

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Good morning, colleagues! In this article, we will talk about what Bid and Ask are on the stock market, give a definition of each type of price and examine their characteristics. By understanding what the Bid and Ask price is, the trader will be able to correctly place buy or sell limit orders, as well as competently control the transaction. For example, not allowing the market to bypass the Take Profit or catch the Stop Loss order before the price goes in the necessary direction. Let's see what Bid and Ask are in trading. In this article we will analyze: What is Bid and Ask? Bid Price Ask Price Bid and Ask price formation How to Calculate a Bid-Ask Spread Example of the Bid and Ask spread Tips for trading with Bid and Ask prices in Forex Conclusion Bid and Ask Pricing Questions and Answers What is Bid and Ask.

The ASK price is the bid or offer price; the one that Mexico Mobile Number List the seller establishes. The BID price is the ask or ask price; the one the buyer offers. The difference between the Ask and Bid price is called the "spread." In the course of negotiations, sellers and buyers take actions to offer each other the prices that are most profitable for the business in order to obtain profits. Due to the difference in Ask and Bid prices, a spread is formed. Since market participants cannot always agree, we sometimes see an expansion of the spread, that is, a significant difference between the Ask and Bid price. In places of accumulation of traders' interest, the spread is reduced, sometimes it is even zero. This usually involves a large number of sellers and buyers.



Some want to get rid of the asset as quickly as possible, others want to buy it as quickly as possible. Here the gains in the sale and purchase prices have a secondary meaning. The broker wins on the spread. Because of the Ask prices, the sellers, who set their price, win, and the buyers win with the Bid prices. The trader in turn wins thanks to the significant difference between the purchase and sale prices of the asset. That is, with points. We will analyze the pricing process on an example of classical market relations. In any market there are always two parties present: the seller and the buyer. Supply and demand control the movement of money, that is, prices in the financial market. Sellers and buyers negotiate with each other, hoping to get the best price to make their work profitable.