Get your RS1 membership here now!  We use PayPal.com to make payments on-line with a credit card - it's fast and secure! Join Now
Take RS1's totally free two-week trial offer now!  Send no money! Free Trial
Very informative tutorial, explains how RS1 works. Tutorial
The most commonly asked questions of RS1. FAQ
Nice layout of all links at RS1 Site Map
Useful information about RS1. Help
Quick look at how RS1 began. About Us

Click here to send an Instant Message to LLH. Chat with LLH
Welcome to RollingStock100.com!
Home | Members Login | Classroom | Research | Message Boards | Contact RS1
Complete layout of navigational links at bottom of page | Page tab navigation

New York Stock Exchange trading hours are 9:30AM-4:00PM ET, except weekends & major US holidays
Click here to Login and view the list of 100 Rolling Stocks


What's the relationship between Ask and Market Prices?

Previous? Next? Table of Contents


Probably the easiest way for me to explain this, is by telling you to run a quote on one of the stocks that you're interested in. Looking at the quote you'll see that there is a "price," which is what the stock is listed at and that's about all the "price" is good for. Which is to say, that it's just a good guide line, for telling you where the stock is at price wise. You'll also see the "ask price," which is the price that you will actually pay (- commissions) if you choose buy the stock. Next is the "bid price," this is what you'd receive if you were to sell the stock (- commissions.)

Okay next thing is to figure the "spread." The spread is not reported on the quote. However if you subtract the bid price from the ask price, you'll have what is known as the spread. The smaller the spread the better. If it's quite small, say only .03 to .25, that shows you that there is a strong interest in this company, by other traders. If it's rather wide, like maybe .50 to 1. or so, there could be some problems experienced in selling this stock, primarily due to lack of interest by other traders (it's possibly suffering from low volume also.) This isn't a cut in stone rule, just a simple rule of thumb, that I've found to be often true.

Now with the above mentioned information rolling around in your head, go look at your selected stock's chart. If the chart indicates that the price is 12.00 and you just saw on the quote, that the ask is 12.00 too, then you can see that the price is probably on the rise, at least at that moment. The opposite is true if it's dropping, in regards to the bid and the market price being at the same price. You already know what the spread is, from having just viewed the quote. Let's say that in this case that the spread is .06. Most of the time the spread isn't going to change much throughout the day, but it's really easy to just run another quote on it, to see if it has changed.

Basically the price will bob up and down taking the bid and ask prices with it, during which time the ask and bid will likely maintain the six cent spread between them while all this fluctuating of the price is going on. Anyway in this situation the "ask price" should hang within .06 of the "price."
Navigate RS1 with these links
Go to Top of Page

Members Log-in Here * The 100 Rolling Stocks * The Rolling Stocks Charts * The RollingStock100 Portfolio
Home Page * Home Page with tabs * memberships * Free Trial * Testimonials * Guestbook * Map of Web Site * My Email * Search RS1 * Tutorial * F.A.Q. * Help * About RS1 * News
Research * Research with tabs * Financial Sites * Stock Calculator * Currency Converter * Technical Charts * Look Ahead charts * S&P; Forecast * Random Symbols
The Classroom * The Classroom with tabs * Financial Library * Audio Tapes * Investing Dictionary * Forums Index * Netscape Users * Contact RS1
Odds & Ends with tabs * The Elves of RS1 * Auction * Classified Ads * Horoscope * Fun Games * Daily Joke * Short Stories * Swap Links * Add a Link


Today’s Markets

Member Of Candlestick Shop Banner Exchange
Let VectorVest analyze your stocks.
Enter Symbol
  
Get on the RollingStock100 "non-members" Weekly Emailing List. You get all new weekly info free "minus" the actual list of 100 Rollers:
Click Here to Join the Non-members Email List.
Get the 100 Rollers included... Free!

Member Of Candlestick Shop Banner Exchange


The Financial Ad Trader
The Financial Ad Trader
RollingStock100TM, 1998-2006, Disclaimer Statement
Direct questions about this website to Webmaster@RS1.biz