Bid & Ask (the Spread)
Two prices always exist — what buyers will pay and sellers will take. The gap is your invisible cost per round trip.
Placing TradesBeginner 4 min read· Lesson 3 of 11 in Stock Market Basics
Definitions
The BID is the highest price anyone will currently pay; the ASK (offer) is the lowest anyone will sell for. A market buy pays the ask; a market sell hits the bid. The spread between them is the cost of immediacy — collected by whoever provides the resting orders.
Why it matters
A $0.02 spread on a $200 stock is negligible; a $0.10 spread on a $2 stock is 5% — you're down 5% the instant you enter. Spread (not commission) is the dominant trading cost in small names, and it scales with illiquidity and volatility.