Basics of the Bid, the Ask, and the Bid-Ask Spread in Stock Trading

If you want to purchase shares right away, you are going to have to pay the asking price. Similarly, if you want to sell shares right away, you have to pay the bidding price. Bid: -What people are looking to get the order at -If you want to purchase 100 shares of Nike, you might bid $50.90, but the ask is $50.98 -In order to get that order, you need to pay $50.98 Ask -What people are looking to get for the stock Bid-Ask Spread -It is the difference between the bid and the ask -What the market makers have to make -i.e. $50.98-$50.90 = $0.08 -$0.08 is what the market makers get paid to execute that order -As soon as you purchase the stock you lose $0.08 per share -You can't buy and sell immediately because it will be costly -You need to take the bid-ask spread into account when trading ★ SUBSCRIBE TO MY YOUTUBE: ★ http://bit.ly/addtradersfly ★ ABOUT TRADERSFLY ★ TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing. Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better. Stock trading and investing is a long journey - it doesn't happen overnight. If you are interested to share some insight or contribute to the community we'd love to have you subscribe and join us! STOCK TRADING COURSES: -- http://tradersfly.com/courses/ STOCK TRADING BOOKS: -- http://tradersfly.com/books/ WEBSITES: -- http://rise2learn.com -- http://criticalcharts.com -- http://investinghelpdesk.com -- http://tradersfly.com -- http://backstageincome.com -- http://sashaevdakov.com SOCIAL MEDIA: -- http://twitter.com/criticalcharts/ -- http://facebook.com/criticalcharts/ MY YOUTUBE CHANNELS: -- TradersFly: http://bit.ly/tradersfly -- BackstageIncome: http://bit.ly/backstageincome

Comments

1. Thank you ! I've been to so many sites and couldnt get a simple answer. I just subscribed !
2. thank you , that was so easy to understand !
3. If i buy a stock at 20 cents a share and the next day its trading at 40 cents a share but, the current "Bid" is at 25 cents a share, am i going to get 40 cents a share or the "Bid" price of 25 cents a share when i sell it? Sorry if i'm not making sense since i am just starting to grasp the concept of buying and selling stocks.
4. Yesterday, EPE bid price was like 2,50$ and the ask at 6,80$....wtf
5. quick question. nobody has ever been able to answer. why is there a spread at all? why cant NKE be 50.90 ask and 50.98 bid at the same time to stop the confusion?
6. So essentially you profit when the bid price overtakes the ask price right? For example if I bought x number of shares at 50.98 (ask) and kept them for a while and the bid price climbs to say 51.50? Please help me in this regard.
7. very helpfull videos
8. I think 1STMILLIONROAD is better than this to make money.
9. so say a stock is selling at 100 a share and the bid is 99.00.. when buying if I keep that stock I'm already making a dollar off it correct???
10. Why do they teach us in manuals that when you place a market order you get the stock at the current market price yet according to this video you are saying we would get the stock at the current ask price on a market order not the current market price that is confusing. If GOOG is setting at 150 market price 152 ask 148 bid and I place market order do I pay 150 or 152? Why is it called a market order and not an ask order then ?
11. The one thing that I don't understand and am unsure about is if instead of placing a "market order" for a current $2/$3 bid-ask hypothetical stock, let's say I place a "limit" order in which I only want to sell my stock at $4. When the "ask" price finally gets to my $4, does that mean that I am actually going to receive the $4 for my stock, or is the price I will receive going to be whatever the "bid" price (let's say it's $3) is at the time that my $4 "ask" price is the current lowest "ask"? Because from what I've read and seem to understand about the bid/ask price is that there is always some sort of discrepancy between the bid/ask-- the "spread"-- so the "market makers" can make their little profit. I'm hoping you can help me sort this out, it would be greatly appreciated. Thanks a lot.
12. thank you so much
13. Can i sell my stock at ask price?
14. Please help me understand this, anyones help would be appreciated, I know the answer is a very simple straightforward one I just can't find it. Heres an example:
    
    Bid is 20.87, ask is 20.88. Bid/ask size are both at 0. That's it. 
    
    I know the size means (ask size for instance) how many shares available at that price before changing at a higher rate if buying at market order, but what does 0 mean? Does it mean no shares are available for purchase? Does it mean as many stocks as you want are available at that price?
    
    Please answer, new to common stock trading and this threw me a curve ball. Cant find the info anywhere on what a "0" bid/ask size means.
15. Good video - I always wondered where the value of the difference went
16. Wow this was the easiest learn how I have ever seen. Thank you. I thought I would have to watch multiple vids to understand it.
17. +Sasha Evdakov
    
    Thanks for the explanation very good and concise.
18. I CANNOT HEAR THE SOUND
19. Hi, thank you so much just love it!!!!!! can you make a tutorial on MACD?
20. May I ask who are the market makers? How do they actually make money through the bid-ask spread? Because I was thinking the brokers only earn the tax per transaction.