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 XYZ 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 XYZ 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 the two prices is called the bid-ask spread. If an investor purchases shares in XYZ, 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 Stocks Basics: How to Read a Stock Table/Quote.

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

    The bid and ask prices are stock market terms representing the supply, or the shareholder, and demand, or investor, for a ... Read Answer >>
  2. Why are the bid and ask quotes usually so far away from each other in after-hours ...

    The low volumes typically traded through after-hours trading systems can create wide bid-ask spreads. Read Answer >>
  3. When is a buy limit order executed?

    A buy limit order is only executed when the asking price is at or below the limit price specified in the order. Read Answer >>
Related Articles
  1. Investing

    The Basics of Trading a Stock: Know Your Orders

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  2. Insights

    Twitter Stock Falls 16.28% in Pre-Market Trading After Report Says Google, Apple Won't Bid (TWTR, AAPL)

    Three potential suitors are said to be not interested in Twitter. This leaves only Microsoft and Salesforce from among the names suggested to be interested in the company.
  3. Investing

    How To Calculate The Bid-Ask Spread

    It's very important for every investor to learn how to calculate the bid-ask spread and factor this figure when making investment decisions.
  4. Small Business

    What are antitrust laws?

    Learn about antitrust laws or "competition laws." These statutes protect consumers from predatory business practices by ensuring fair competition exists.
  5. Trading

    How To Avoid Closing Options Below Intrinsic Value

    To get the best return possible on your options trading, it is important to understand how options work and the markets in which they trade.
RELATED TERMS
  1. Bid Size

    The bid size represents the minimum quantity of a security that ...
  2. Best Bid

    Best bid is the highest quoted bid for a particular security ...
  3. Bid Price

    Bid price is the price a buyer is willing to pay for a security. ...
  4. One-Man Picture

    A one man picture is when a security's bid price and ask price ...
  5. Bid Rigging

    Bid rigging is an illegal practice in which competing parties ...
  6. Bid Whacker

    A bid whacker is a slang term for an investor who sells shares ...
Trading Center