Touchline

DEFINITION of 'Touchline'

The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing to sell, at a given time in the trading day. The touchline therefore specifies the best bid or ask for a particular security at any point in time. Very liquid securities will generally have a narrow bid-ask spread, while illiquid securities will have a wide spread.

BREAKING DOWN 'Touchline'

For example, if security A has various buyers who are bidding $5, $5.10 and $5.15 for it, the touchline bid price would be $5.15. At the same time, if security A has various sellers at $5.20, $5.30 and $5.35, the touchline ask price would be $5.20. The bid-ask spread on security A is therefore $5.15 (bid) / $5.20 (ask).

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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. What's the difference between bid-ask spread and bid-ask bounce?

    Understand the difference between the bid-ask spread that determines the buy or sell price for a stock and a bid-ask bounce, ... Read Answer >>
  3. What types of stocks have a large difference between bid and ask prices?

    Find out which factors influence bid-ask spread width. Learn why some stocks have large spreads between bid and ask prices, ... 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. What do the numbers that follow the bid and ask numbers in stock quotes represent? ...

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  6. Why are the bid prices of T-bills higher than the ask prices? Aren't bids supposed ...

    Yes, you are correct that the ask price of a security should typically be higher than the bid price. This is because people ... Read Answer >>
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