Every time you look up a stock on your trading platform, you’ll notice two prices not one. These are the bid price and the ask price, and the difference between them is called the spread. Understanding these three terms helps you trade more efficiently and avoid paying more than you need to.
Bid Price
The bid price is the highest price a buyer is currently willing to pay for a stock.
If the bid price of Infosys is ₹1,500, it means the best offer any buyer in the market has placed right now is ₹1,500 per share. If you’re selling, this is the price you’ll get if you sell immediately.
Ask Price
The ask price (also called the offer price) is the lowest price a seller is currently willing to accept.
If the ask price of Infosys is ₹1,502, it means the cheapest anyone is willing to sell that stock for right now is ₹1,502. If you’re buying, this is the price you’ll pay if you buy immediately.
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