Lesson 4: Bid and Ask Prices

“The bid price is the highest price a buyer is willing to pay for an asset, while the ask price is the lowest price a seller is willing to accept. For example, if a stock’s bid price is $100 and the ask price is $101, the difference is $1. This difference is called the spread, which brokers earn as a fee. Understanding bid and ask prices helps you make informed decisions about when to enter or exit a trade.”