Bid vs. Ask: What the Bid and Ask Prices Mean
By Forex & Brokers DeskUpdated Nov 10, 2026
Definition
The bid is the highest price a buyer will currently pay, and the ask is the lowest price a seller will accept. The gap between them is the bid-ask spread.
Key takeaways
- A two-sided quote shows the bid and the ask together, written as bid / ask (for example, $10.50 / $10.55).
- Market orders buy at the ask and sell at the bid, so crossing the spread is an implied trading cost.
- Quotes often show the size available at the best bid and best ask. Bid size is how much buyers want at the bid; ask size is how much sellers offer at the ask.
The bid is the highest price a buyer in the market is currently willing to pay for an asset. The ask (also called the offer) is the lowest price a seller is currently willing to accept. The ask is normally higher than the bid. The gap between them is the bid-ask spread. A trader who buys immediately pays the ask, and a trader who sells immediately receives the bid.
How bid and ask prices work
Most retail traders are market takers. They accept the prices that are already displayed instead of posting their own. A taker who wants to buy right now has to meet the lowest seller, and a taker who wants to sell right now has to meet the highest buyer.
Hypothetical example (stock): ABC Corp. is quoted at $10.50 / $10.55. Investor X buys at the market and pays $10.55. Investor Y sells at the market and receives $10.50. If X bought and then sold straight away with no price change, X would lose $0.05 per share. That loss is the spread.
The other side of those trades is often a market maker. A quote of $10.50 / $10.55 means the market maker stands ready to buy at $10.50 and sell at $10.55. Completing both sides captures the $0.05 difference, which pays the market maker for providing liquidity and carrying inventory risk.
Bid and ask in a forex quote
Currency pairs are quoted the same way, with the spread usually measured in pips. A broker’s buy and sell buttons correspond to the ask and the bid.
Hypothetical example (forex): EUR/USD is quoted at 1.1000 / 1.1002, a spread of 2 pips. You buy one standard lot (100,000 euros) at 1.1002. For a pair quoted in US dollars, one pip on a standard lot is worth $10, so the position opens $20 below breakeven. The bid has to rise to 1.1002 before the trade is flat. This assumes no commission and an unchanged spread.
Direction decides which side matters for an exit. A long position is closed by selling at the bid, and a short position is closed by buying at the ask. A short’s stop-loss order can therefore trigger when the spread widens, even if the bid barely moves.
How bid and ask prices are determined
Bids and asks come from the orders of buyers, sellers and market makers. When demand outstrips supply, buyers raise their bids and sellers lift their asks, so both drift upward. When supply outstrips demand, both drift down.
The width of the spread depends largely on trading activity. Heavily traded securities attract many competing buyers and sellers, which pushes the best bid and best ask close together. Large blue-chip stocks, such as those in the Dow Jones Industrial Average, may trade with a spread of only a few cents. A small-cap stock that trades fewer than 10,000 shares a day might show a spread of $0.50 or more.
What the spread tells you
When the bid and ask are close together, the security has a narrow spread, which generally signals active trading and ample liquidity. Entering and exiting costs less, and larger positions are easier to move. A wide spread points to thin trading or market stress and makes trading slower and more expensive.
Spreads are not fixed. During illiquid periods or market turmoil, buyers refuse to pay beyond a certain level and sellers refuse to accept less, so spreads can widen sharply in stocks, currencies, futures and options alike. Option contracts in particular can show wide spreads in volatile markets. A sudden widening warns that fills may be worse than the quoted prices suggest.
Bid and ask vs. other prices
- Last price: the price of the most recent completed trade. It may have filled at the bid, at the ask or between them, and it can be stale in a thinly traded market.
- Market price: often used loosely to mean the last price or the midpoint. An actual market order still fills at the ask when buying and at the bid when selling.
- Strike price: in options, the fixed price at which the contract can be exercised. The bid and ask are the prices of the option contract itself, not the strike.
- Offer: the same thing as the ask. Futures traders commonly say “bids and offers.”
Limitations
The displayed bid and ask only apply to the size shown. An order larger than the quoted size may fill partly at worse prices further back in the order book. Quotes can also change between the moment you click and the moment the order executes. In fast markets, that slippage can exceed the spread itself. Narrow spreads also say nothing about direction. A tight quote means trading is cheap, not that the price will move in your favor.
FAQs
Can you buy below the ask?
Yes, with a limit order. A buy limit placed below the ask waits as a new bid until a seller accepts it. The trade-off is that it may never fill. A market order gives up price control in exchange for immediate execution at the ask.
What do "at the bid" and "at the ask" mean on a trade print?
A trade printed at the ask means a buyer accepted the seller's price. A trade printed at the bid means a seller accepted the buyer's price. Traders who watch prints read a run of trades at the ask as aggressive buying and a run at the bid as aggressive selling. That reading describes who crossed the spread, not where the price will go next.
The Bottom Line
Market takers buy at the ask and sell at the bid, so every immediate round trip starts out down by the spread, measured in cents for stocks and pips for currencies. Traders should check spread width and quoted size before entering, because thin or volatile markets widen spreads, cause slippage and can trigger stops even when prices barely move.
