The bid price is the highest price that a buyer is willing to pay for a stock. This is the price that a buyer is willing to pay to acquire the stock. The bid price is usually lower than the ask price, as buyers are typically looking for a bargain.
The ask price is the lowest price that a seller is willing to accept for a stock. This is the price that a seller is willing to accept to sell the stock. The ask price is usually higher than the bid price, as sellers are typically looking for a higher return on their investment.
The difference between the bid price and the ask price is known as the spread. The spread is the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. The spread is an important measure of liquidity in the stock market, as it indicates how quickly a stock can be bought or sold.
In addition to the bid price and ask price, there are other important factors to consider when trading stocks. These include the volume of shares traded, the volatility of the stock, and the overall market conditions. By understanding these factors, investors can make more informed decisions when trading stocks.