What is a bid-offer spread?
The term bid and offer (also known as bid and ask) refers to a two-way price quotation that indicates the potential price at which a share can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share while the offer price (ask) represents the minimum price that a seller is willing to accept for that share. The offer price is always higher than the bid price. You'll pay the offer price if you're buying the stock, and you'll receive the bid price if you are selling the stock.
Bid offer spread = Offer price minus (-) Bid price
Introduction to stock trading
- What is a stock?
- Where do stocks come from?
- What is stock ownership?
- Why do people buy stocks?
- How could you lose money from buying stocks?
- What are stock markets?
- What is a stock broker?
- What is a stock price?
- What is a bid-offer spread?
- What are stock charts?
- What is commission?
- What are bullish vs bearish markets?
- What is technical analysis?
- What is fundamental analysis?
- What are analyst recommendations?
- What are stock financials?
- What is EPS (earnings per share)?
- What is a P/E ratio (Price-to-Earnings)?
- What is a P/CF ratio (Price-to-Cashflow)?
- What is ROE (Return on Equity)?
- What is Market Sentiment?
- What are Market Sentiment Indicators?
- What is the VIX?
- How does News and Social Media impact stocks?