A guide to last sale, ask, and bid prices.
When it comes to buying or selling stock, understanding the meaning behind Bid Price, Ask Price, and Last Sale Price will give you a much clearer picture of the price at which a stock is actually trading. It is important to remember that the stock market is actually an exchange, which means that every time you buy a stock, it’s being sold by someone else, and every time you sell a stock, it’s being purchased by someone else.
Last Sale Price
This is typically shown as a stock’s price on the chart, and is exactly what it sounds like: the price for which a stock last sold. It’s important to know that this is actually historical data, and might not be what you would pay if and/or when you purchase the stock, or what you’d get if you sold it.
Ask Price
The Ask Price, on the other hand, is the lowest price that a person is will to sell the position for.
Bid Price
The Bid Price, is the price that buyers are willing to pay for a stock, regardless of what sellers are asking for it. This works exactly like a bid at an auction – the highest bid wins, and is the highest price someone is willing to purchase the position for.
Spread
The spread is the difference between the bid price and the ask price. For your heavily traded stocks, the spread will have a lower spread, and thinly traded stocks will likely have a higher spread.
To clarify, the price displayed on the chart is the most recent sale price. When you’re buying a stock, you’ll pay the Ask Price, and when you’re selling a stock, you’ll receive the Bid Price.
It’s always important to pay attention to the current Ask & Bid on the order screen when you want to buy or sell, in order to avoid any undesirable prices when the order is filled. The Last Sale Price can be drastically different from what the stock will be traded for when the market re-opens, or different from the current Ask & Bid in thinly traded stocks.
You can always see Ask & Bid Prices by tapping “Buy” or “Sell” on a stock’s page, then tapping the “i” next to “Market price” on the order page.
If you ever have questions, the team is always here for you, so feel free to give us a shout on the app’s Chat or via email at support@public.com.