Ask Price

The ask price – also called the offer price – is the lowest price at which market participants are currently willing to sell a security, a currency or another instrument. Its counterpart is the bid price, the highest price at which market participants are currently willing to buy. Sellers do not want to sell below a certain price (the ask), and buyers do not want to pay more than a certain price (the bid).

How it works

Every price quote is therefore made up of two prices. The ask is normally higher than the bid, and the difference between the two is called the spread. A trader who wants to buy immediately – for example with a buy-at-market order – pays the ask price, because that is the price at which sellers are ready to trade.

Example: a share is quoted at a bid of $50.00 and an ask of $50.05. A buyer who wants the share straight away pays $50.05. If the buyer sold it again immediately, they would only receive the bid of $50.00 – a loss of $0.05 per share, exactly the spread.

Why it matters for traders

On forex and CFD platforms, the "Buy" price is the ask and the "Sell" price is the bid. Long positions are opened at the ask and closed at the bid; short positions are opened at the bid and closed at the ask. Because many platforms draw their charts on the basis of the bid price, a stop-loss on a short position can be triggered by the ask even though the chart has not quite reached the stop level – especially when spreads widen, for example around important news releases or in quiet market hours. The smaller the gap between bid and ask, the lower the cost of every trade.