Bid, ask and spread
The bid is the highest price a buyer is currently willing to pay for a specified number of shares. The ask is the lowest price a seller is currently willing to accept. The difference is the bid–ask spread.
If the bid is $1.00 and the ask is $1.10, the spread is $0.10. That hypothetical quote is a snapshot, not a promise that an entire order will fill at either price.
Liquidity affects execution
Liquidity describes how easily you can buy or sell when you want to. In a thinly traded security, finding someone for the other side of your trade can be difficult. A wide spread can accompany limited liquidity, but the spread alone does not give the full picture.
Order types involve a trade-off
A market order seeks execution at the best available price; it does not guarantee the price. A limit order sets a maximum purchase price or minimum sale price. It may not execute. Neither order type removes the risks of a changing market.
Read the quote in context
Look at the time of the quote, the displayed bid and ask, and available size. A last-trade price records an earlier transaction. It is not necessarily the price available for your order now.
Source review
- SEC Investor.gov — Bid Price/Ask Price
- SEC Investor.gov — Types of Orders
- FINRA — Understanding Disclosure Documents
Sources reviewed October 22, 2026. This guide is general education, not personalized investment advice or a recommendation to buy or sell any security.