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What is a bid Ask?


Milan
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Hi Milan,

Bid-ask can also be called the bid and offer. A bid-ask, therefore, is a measured two-way price quotation that highlights the best possible price at which a security can be traded (bought and or sold) at any given point in time.
 The highest price a buyer is willing to pay for a stock or security becomes the bid price and the asking price is the lowest price a seller is willing to accept for the same security.
A trade is executed when the buyer and the seller agree on a common bid and ask price for the same security. The agreed price must therefore not be lower than the asking price and not higher than the bid price.
The resultant difference between the bid and ask price or the spread for a particular security or asset, therefore, becomes the indicator of the level of liquidity for that same security or asset.
 

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