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

The bid price is opposed by the ask price, which is the amount a seller will accept for a security. A security’s current price is the last price paid for it, and it’s usually different from the bid and the ask.

A trade doesn’t occur until the buyer and seller agree on a price.

Think of it as buying a used car. Your bid price is what you offer to pay for the car, and the ask price is what the dealer wants for it. You can walk away and search for a car at a different lot or stay and haggle with the dealer until you agree on a price.

The difference between the bid price and the ask price is the spread, which indicates an asset’s liquidity, or the ease with which it can be sold. Especially liquid assets will have spreads that are pennies apart.

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