FOUNDATIONS3 MIN READ
Every stock actually has two prices at once: the bid/ask spread — the highest price a buyer will pay (the bid) and the lowest a seller will accept (the ask). The single number you see quoted is usually a mid price, sitting between the two — not a price you can actually deal at.
Buy, and you pay the ask; sell, and you receive the bid. On a busy stock the gap is a rounding error; on a thin one it can be real money. Add in slippage — the price drifting between when you click and when the order actually reaches the exchange — and the fill you get can sit a little away from the quote you were looking at a second earlier.
Bid · £4.98Mid · £5.00Ask · £5.02
A 4p spread on a £5 stock — small, but never actually zero.
Educational content only. It is not personal financial advice.