Last updated: October 17, 2026
How the bid works
Every stock quote shows two prices. The bid represents demand: limit orders to buy waiting in the order book, with the highest one displayed as the best bid. The ask (or offer) represents supply. When you sell at market, you generally receive the bid; when you buy at market, you generally pay the ask.
Quotes often include a bid size, the number of shares available at that price, frequently shown in round lots of 100. In the US, the highest bid and lowest offer across all exchanges form the National Best Bid and Offer (NBBO), which brokers use as a reference for best execution.
The bid is not a fixed price. It is simply the best price among the buy orders resting in the book at that instant, and it can change many times a second in an active stock.
Example: bid, ask, and spread
Suppose a hypothetical stock shows a bid of $32.10 for 500 shares and an ask of $32.14 for 300 shares. The spread is $0.04. If you place a market order to sell 200 shares, it would typically fill at about $32.10, bringing in $6,420.
If instead you place a limit order to sell at $32.13, you join the ask side and wait for a buyer. You might capture three extra cents per share, but your order may not fill if the price moves away. Large orders can exhaust the shares at the best bid and fill at lower prices, an effect known as slippage.
Bid vs ask
- Bid: the highest price buyers are offering; the price sellers receive on a market order.
- Ask: the lowest price sellers are accepting; the price buyers pay on a market order.
- Spread: the ask minus the bid, an implicit trading cost and a gauge of liquidity.
Heavily traded stocks often have spreads of a penny, while thinly traded OTC stocks or small companies can have spreads of several percent.
What moves the bid
Bids change constantly as buyers add, cancel, or adjust orders. Positive news can lift bids as buyers compete, while selling pressure can drive them lower. Bids are often thinner and spreads wider in after-hours trading and around the open, so traders who care about price often use limit orders during those periods. Watching how the bid holds during a decline can offer a rough sense of where buyers are stepping in.
Market makers continuously post bids and asks, earning the spread in exchange for providing liquidity and standing ready to trade.
Frequently asked questions
What is the difference between bid and ask price?
The bid is the highest price a buyer will pay, and the ask is the lowest price a seller will accept. The difference between them is the spread.
Do you buy at the bid or the ask?
A market buy order typically fills at the ask, and a market sell order typically fills at the bid. Limit orders let you name your own price.
What does bid size mean?
Bid size is the number of shares buyers want to purchase at the current bid price, often displayed in lots of 100 shares.
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For information only, not investment advice. See the disclaimer.