ask price
The lowest price a seller is willing to accept for a security at a given moment. Also called the offer price.
Example
“With an ask price of $50.00, sellers wouldn't part with the stock for less than $50 per share.”
Memory Tip
ASK price = what sellers ASK for. The 'sell' side of the market.
Why It Matters
Understanding the ask price helps you recognize the actual cost of buying a security and avoid overpaying. When you place a buy order, you will typically pay at or above the ask price, so knowing this figure is essential for budgeting your investment and comparing costs across different securities or market conditions.
Common Misconception
Many people assume the ask price is the only price they might pay, but in reality they often pay slightly more due to trading commissions, fees, or market conditions that cause the price to move before their order executes. Additionally, some believe the ask price is negotiable for individual retail investors, when in fact it is a posted market price that applies equally to all buyers.
In Practice
Suppose you are watching shares of Company ABC trade with a bid price of 50.00 dollars and an ask price of 50.05 dollars. If you place a market buy order for 100 shares, you will pay approximately 5,005 dollars plus any trading fees to acquire those shares, rather than the lower bid price that only sellers are offering.
Etymology
ASK = the seller ASKS (requests) a certain PRICE for the security.
Common Misspellings
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Related Terms
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See Also
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