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Bid and Ask

The Bid is the price at which your broker will buy your position from you, the Ask is the price at which he will sell you a position. The distance between the bid and the ask depends on many factors, such as how liquid the security is, how volatile the market is generally, the ratio of buyers to sellers and so on. This is why prices have 2 numbers - for example the price of Ebay might be quoted as 48 - 49. This means that if you want to BUY a share of Ebay, it will cost you 49 dollars, but if you want to SELL a share, you will only get 48 dollars for it. In the morning papers, usually only 1 price is shown, and this is the MID price (the average of the bid and ask). Think of it like foreign currency - when you go into a Bureau de change, they will give you£60 for your $100, but if you want to sell them that £60 back, you will only get $95. Spread betting companies have wider spreads between bid and ask than traditional brokers, in order to make up for the lack of commission charges.Note - the "Best Bid" for a stock is the higest price that a buyer is willing to pay for that stock at that particular point in time. The "Best Ask" is the lowest price that a seller is willing to accept for a stock. A Bid is made up of an actual Buy Limit Order that has been placed into the market. An Ask is made up of an open Sell Limit Order.

The SureFireThing Camarilla Equation for use in day trading is available online from these websites: