What Is the Ask?
The ask, also called the offer price, is the price at which a seller is willing to sell a security, along with the quantity available at that price.
Definition
The ask is the price a seller is prepared to accept for a security. It represents the lowest price at which a seller is willing to sell.
An ask quote also includes the quantity of the security available at that price. The ask is always higher than the bid, which is the price a buyer is willing to pay.
How It Works
In financial markets, securities are quoted with both a bid and an ask price. The ask reflects selling interest, while the bid reflects buying interest.
The difference between the bid and the ask is known as the bid-ask spread. This spread varies depending on factors such as liquidity, volatility, and market structure.
Why the Term Matters
The ask helps explain how transaction prices are formed in markets. It is essential for understanding trading costs, liquidity, and how easily a security can be bought or sold.
Changes in the ask price can reflect shifts in supply, demand, or market conditions.
Related Concepts
- Bid
- Bid-ask spread
- Offer price
- Market liquidity
- Quotation
- Order book
FAQs
What is the ask price?
The ask price is the price at which a seller is willing to sell a security.
Is the ask always higher than the bid?
Yes, the ask is always higher than the bid, which represents the buyer’s offered price.
What does the ask quote include besides price?
The ask quote includes the quantity of the security available at the stated price.
What is the bid-ask spread?
The bid-ask spread is the difference between the bid price and the ask price.
Does the ask price change frequently?
Yes, the ask price can change continuously based on market activity, supply, and demand.
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