What is Ask Price

Any exchange involves two parties: the buyer and the seller. Naturally, each of them sets a price they are willing to trade the asset for. This bi-directional price quotation is referred to as the "bid and ask" system. The bid price is the highest amount the buyer is willing to pay for an asset, whereas the ask price is the lowest amount the seller is willing to accept selling the asset for. The difference between the buying and selling prices is referred to as the spread and is a measure of the asset liquidity. Liquidity and spread typically vary inversely: more liquid markets usually have lower spreads. Market makers, individuals or organizations that quote both bid and ask prices in two-sided markets, benefit from larger spreads which make up their profits.