Bid Price vs. Ask Price
Basis |
Bid Price |
Ask Price |
---|---|---|
Definition |
The highest price a buyer is willing to pay for a security. |
The lowest price a seller is willing to accept for a security. |
Perspective |
Buyer’s perspective. |
Seller’s perspective. |
Purpos |
Indicates the demand and the price buyers are willing to start negotiations at. |
Indicates the supply and the price sellers are willing to settle at. |
Influence on Trade |
Determines the maximum price for a potential purchase. |
Determines the minimum price for a potential sale. |
Market Impact |
Higher bid prices can indicate strong demand and potentially higher future prices. |
Lower ask prices can indicate high supply and potentially lower future prices. |
Role in Spread |
One half of the bid-ask spread, representing the buyer’s side. |
The other half of the bid-ask spread, representing the seller’s side. |
Visibility |
Visible to the market in the order book, showcasing buying interest. |
Visible to the market in the order book, showcasing selling interest. |
Bond Quote: Meaning, How to Read & Types
A bond quote refers to the current market price at which a particular bond is trading. It typically includes information such as the bond’s issuer, maturity date, coupon rate, and yield. Bond quotes are essential for investors who are buying or selling bonds as they provide crucial information about the bond’s current value and yield. The quote may also include bid and ask prices, representing the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask).
Geeky Takeaways:
- Bond quotes provide investors with the current market value of a bond, which is crucial for making informed investment decisions.
- Bond quotes often include yield information, such as the bond’s yield to maturity (YTM) or current yield.
- Bond quotes typically include bid and ask prices, indicating the prices at which buyers are willing to purchase the bond (bid) and sellers are willing to sell it (ask).
Table of Content
- How to Read a Bond Quote?
- Types of Bond Quotes
- Face Value Quotes
- How Do Changes in Interest Rates Affect Bond Quotes?
- What is the Significance of a Bond Being Quoted at a Premium vs. at Discount?
- Bid Price vs. Ask Price
- Bond Quote – FAQs
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