What Is Bid?
Bid is the price where buyers are willing to buy.
In simple terms, when a buyer places a buy limit order, it is placed on the bid side.
Key Points
- Buyers place bid orders
- Bid orders wait for sellers to sell to them
- The highest bid is the best price buyers are offering
Example
If the Bid = 100:- Buyers want to buy at 100
- Sellers must accept 100 for the trade to happen
What Is Ask?
Ask is the price where sellers are willing to sell.In simple terms, when a seller places a sell limit order, it is placed on the ask side.
Key Points
- Sellers place ask orders
- Ask orders wait for buyers to buy from them
- The lowest ask is the best price sellers are offering
Example
If the Ask = 101:- Sellers want to sell at 101
- Buyers must accept 101 for the trade to happen
Bid–Ask Spread
The spread is the difference between bid and ask.Example:
- Bid = 100
- Ask = 101
- Spread = 1 tick
Limit Order
- Buy limit → placed at the bid or below
- Sell limit → placed at the ask or above
- Waits for price to come to you
Why Price Moves
Price moves when:- Buyers hit the ask aggressively--price goes up
- Sellers hit the bid aggressively--price goes down
- Eat multiple bid or ask levels
- Move price many ticks quickly
- A massive buy order hits the ask
- Several ask levels get filled
- Price jumps up 20–30 ticks
Simple Rule for Beginners
- Aggressive buyers → price goes up
- Aggressive sellers → price goes down
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