Pricing & Fees
Bid, Ask, Spread, and Liquidity: Reading a Quote
Learn what bid, ask, and spread mean—and why comparing two displayed prices is not enough without quantity, market depth, and fees.
What are bid and ask?
In an order book, the bid is generally the highest displayed price a buyer is willing to pay, and the ask is the lowest displayed price a seller is willing to accept. The difference is called the spread. These quotes can change as orders arrive or execute.
The spread is not the full cost
The spread may indicate how competitive the best displayed offers are, but it does not by itself describe market depth or the execution price for a large order. An order can consume several price levels, and venue or network charges may be separate. Check available quantity, order size, and expected net execution.
A simple example
One venue might show a narrow spread at its best prices but only a small quantity, while another shows a wider spread with larger quantities across several levels. The first two numbers alone do not settle which fits a particular order; inspect depth, fees, and size.
Key takeaway
Understand the bid, ask, and spread, then check market depth, expected execution, and fees. Displayed prices can change before an order is completed.
Related reading
Official sources
This article is for informational purposes only and is not a price quote.