# Key Post: What's the difference between the bid and ask price



## Marion (8 Aug 2003)

What is the difference between the bid price and the ask price and why in certain circumstances is the difference so big?

Thanks.


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## Brendan Burgess (8 Aug 2003)

*Re: Stock market*

I get these confused, so I hope I have the names right.

If I am buying a share I bid €2 for it. If you are selling, you might ask for €2.20 for it.

Someone else comes in and bids €2.10 and maybe the seller will accept that bid.

The gap on frequently traded shares is very narrow. Shares like AIB and CRH are so frequently traded that there is often no gap.

In a rarely traded share the gap could be very large indeed.

Brendan


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## ferryman (8 Aug 2003)

*re stocks*

Say the share I want to buy is €6 in the morning paper. I phone my broker and tell him buy. He asks  at what price? What do I say....€5.70    or    €6.30? Or tell him to buy at the best price he can get, stating a maximum? Can I do this? And will he have to comply?


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## suspicious (8 Aug 2003)

*What's the difference between the bid and ask price*

At the same time do all brokers have the identical bid and ask price? and can this be verified to prevent a broker offloading a particular share that it may own when i ask to buy "at best"? i think when a specific buy or sell price is given the broker is tied to this instruction and  i think all calls are recorded


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## Brendan Burgess (8 Aug 2003)

*Re: What's the difference between the bid and ask price*

Yes, you can tell your broker to buy a share up to a price of €6. If you do this, the broker will buy as cheaply as possible, but will not pay €6.10 for it. 

The whole process is electronic. If a seller puts in his ask price of €6.20 and your broker puts in his bid price of €6.00, they will be visible to the whole market. If the seller wants to he can click on your €6 offer and sell the shares to you.

Your broker may exercize his discretion and not input your bid of €6, if he feels that the ask price may drop. 

Brendan


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## rainyday (9 Aug 2003)

*Re: What's the difference between the bid and ask price*



> The whole process is electronic.



Is this true for the ISEQ market? I thought it was still the oul duffers sitting round the table in Angelsea St!


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## Brendan Burgess (9 Aug 2003)

*Re: What's the difference between the bid and ask price*

Rainyday

I think that the old duffers are gone, but I must drop in to check them out. They were always very entertaining to look at.

Brendan


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