How does Bid and Ask Work
First of all, What’s a bid? And what’s an ask?
In this episode of the Rob Tetrault show we dive into the world of day trading and playing the bid and ask game.
A Bid is what i’m willing to pay for a specific share, debenture, or a bond. An ask is what i’m willing to receive when selling my shares. The distance between the two would be the spread, in other words the bid ask spread. As soon as the spread is at zero meaning that the bid and the ask are at the same number, that's a trade.
Tighter spreads are typical to larger, more established companies where there is a ton of volume and a lot of people are buying and selling every day.
Wider spreads happen on penny stocks and on smaller, less established companies.