Ask Price

Definition

The term ask price is used to describe the price at which an investor is willing to sell a security.  The ask price is the converse of the bid price, which is the price an investor is willing to pay when buying a security.

Explanation

Ask and bid prices are of prime importance to the equities market as well as other financial instruments, since they tell investors the prices at which an investor is willing to sell or buy a security.  These two values are always quoted as a pair, with the ask price always being the higher value.  The difference between these two values is known as the bid /ask spread.

When an investor places a market order for a security, they are telling their broker to make the purchase at the best available price.  In order to provide the investor with a near instantaneous purchase, the price paid for the security will be the ask price.

The quotes provided by services, such as Google Finance, are typically the ask price.  This value is not the same as the last price, which as the name implies, represents the last price at which a trade occurred.  The last price is typically shown on charts and updated as new trades occur.

Related Terms

non-equity option, bid price, margin call, market maker