A:

When looking at stock quotes, there are numbers following the bid and ask prices for a particular stock. These numbers usually are shown in brackets, and they represent the number of shares, in lots of 10 or 100, that are limit orders pending trade. These numbers are called the bid and ask sizes, and represent the aggregate number of pending trades at the given bid and ask price.

For example, assume we get a stock quote for ZXC Corp. and we see a bid of $15.30 (25), and an ask of $15.50 (10). The bid price is the highest bid entered to purchase ZXC stock, while the ask price is the lowest price entered for this same stock. As you can see, there are numbers following the bid and ask prices, and these are the number of shares that are pending trade at their respective prices. At the current limit bid price of $15.30, there are 2,500 shares being offered for purchase, in aggregation. The aggregation is for all bid orders being entered at that bid price, no matter if the bids are coming from one person bidding for 2,500 shares, or 2,500 people bidding for one share each. The same is true for the numbers following the ask price.

If these orders are not carried out during the trading day, then they may be carried over into the next trading day provided that they are not day orders. If these bid and ask orders are day orders, then they will be canceled at the end of the trading day if they are not filled. The spread between these two prices is called the bid-ask spread. If an investor purchases shares in ZXC, he or she would pay $15.50. If this same investor subsequently liquidated these shares, they would be sold for $15.30. The difference is a loss to the investor.

To learn more, see Why The Bid-Ask Spread Is So Important, Reading Financial Tables and Stocks Basics: How To Read A Stock Table/Quote.

RELATED FAQS
  1. What do the bid and ask prices represent on a stock quote?

    Learn what the bid and ask prices mean in a stock quote. Find out what represents supply and demand in the stock market and ... Read Answer >>
  2. How do day traders capture profits from the difference between bid and ask prices?

    Discover how day traders capture profits from the difference between bid and ask spreads. These spreads blow out during volatile ... Read Answer >>
  3. What does the variance between the bid and ask price of a stock mean?

    Find out how stocks are traded in the market, why the bid and ask prices are different and why the bid-ask spread is smallest ... Read Answer >>
  4. How do I use a limit order in conjunction with a bid-ask spread?

    Understand the concept of the bid-ask spread as it applies to trading and how it impacts the pricing of limit orders used ... Read Answer >>
  5. When is a buy limit order executed?

    Understand how buy limit orders work, and factors such as the bid-ask spread and market volatility that traders must consider ... Read Answer >>
Related Articles
  1. Investing

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  2. Investing

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  3. Trading

    The Basics of the Bid-Ask Spread

    Successful traders must be aware of the difference between the bid price and the asking price of a security.
  4. Investing

    How To Read A T-Bill Quote

    If you want buy and sell US Treasury bills, you need to learn to read the quotes.
  5. Personal Finance

    How The Auction Market Works

    Here's a look into the online auction market and how to get yourself the best value possible on sites like eBay and Quibids.
  6. Investing

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
  7. Investing

    How To Create A Real Estate Bidding War

    There are still many areas in the United States that are attractive enough to buyers that you can start a good, old-fashioned bidding war on your property.
  8. Investing

    Understanding Stock Quotes

    All you need to know about understanding stock quotes.
  9. Investing

    Explaining Dutch Auction

    A Dutch auction is a public offering auction.
RELATED TERMS
  1. Bid Tick

    An indication of whether the latest bid price is higher, lower ...
  2. Bid Support

    A manipulative practice employed to prop up a company’s stock ...
  3. Bid Whacker

    A slang term for an investor who sells shares at or below the ...
  4. One-Sided Market

    When the market for a security only shows either one bid or one ...
  5. Bid And Asked

    A two-way price quotation that indicates the best price at which ...
  6. Price Transparency

    The accessibility of information on the order flow for a particular ...
Hot Definitions
  1. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  2. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  5. Indirect Tax

    A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products. An ...
  6. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
Trading Center