Explore commonly used personal finance terms.
The ask price is the lowest price a seller is willing to accept for a security, in contrast to the bid price, which is the highest price a buyer is willing to pay. The difference between these prices, known as the “spread,” represents the transaction cost for traders. The ask price is crucial in trading because it sets a threshold for buyers. In highly liquid markets, the spread is typically small, while in less liquid markets, the spread may be larger, making transactions more costly.
