What are ask/offers and bids?

Asks and bids refer to the prices offered for assets on an exchange or brokerage.

An ask is the lowest price a seller is willing to sell an asset for at a given time. A bid is the lowest price buyers are prepared to pay. The difference in these two prices is called the spread.

If the market price of an asset is currently listed as £5/£5.05 this £0.05 difference is the spread. Spreads allow market makers (large investment brokers that provide liquidity to exchanges) to collect fees for trades to generate revenue.

If an asset is in high demand and has high trading volumes, spreads tend to be much tighter as there are more people willing to buy and sell the asset. If there is less demand, then spreads are wider due to there being fewer buyers and sellers to complete orders.

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