Bid/Ask Price

sevenhills

Bid/Ask Price

This two-way price quotation shows the price that shares in this company can be bought and sold for. The bid price is the maximum the buyer is willing to pay to buy and the ask price is the minimum the seller is willing to receive to sell. The difference between the two is called the spread and is an indicator of liquidity, where the smaller the spread the better the liquidity.


I have never concidered the above, but it seems the higher the spread the higher the risk.

Mr.Saver

The higher the spread the higher the liquidity risk. But liquidity risk is only a part of an investment risk.

Thrugelmir

sevenhills wrote: »

The bid price is the maximum the buyer is willing to pay to buy and the ask price is the minimum the seller is willing to receive to sell.

Market makers set online prices and sit in the middle making a turn.

sevenhills

I have shares in Sirius Minerals plc, seems quite risky, I buy when shares are low.



Sell:3.47p Buy:3.60p

Apodemus

sevenhills wrote: »

I have shares in Sirius Minerals plc, seems quite risky, I buy when shares are low.



Sell:3.47p Buy:3.60p

Ah! Sirius is a strange phenomenon. A much larger proportion of retail investors than most companies, all desperate for the dream to become reality. Only time will tell whether the business plan is visionary or delusional.

Yes it is a risky investment, but the spread is down to relatively small numbers of shares being traded. On the current “recent trades” list is a transaction for six shares at 3.48p, giving a total transaction value of 21p! Who makes a market for 21p?!!

sevenhills

Apodemus wrote: »

Ah! Sirius is a strange phenomenon. A much larger proportion of retail investors than most companies, all desperate for the dream to become reality.

I got my fingers burnt by that ultra safe company that did Government work, Interserve, you would think I would have learnt a lesson there :rotfl:

Brian65

sevenhills wrote: »

I buy when shares are low.

How do you know when they are 'low'?

sevenhills

Brian65 wrote: »

How do you know when they are 'low'?

I look at the 3/5 year historic value, if they were a lower price years ago, they may come back up a little.

AnotherJoe

sevenhills wrote: »

I look at the 3/5 year historic value, if they were a lower price years ago, they may come back up a little.

There's no logical basis whatsoever to draw that conclusion.

Brian65

sevenhills wrote: »

I look at the 3/5 year historic value, if they were a lower price years ago, they may come back up a little.

That doesn't make sense - from what you say they could be at a record high so couldn't 'come back up' at all
Do you mean a higher price years ago?
In which case they may come back up
Or they may go further down
How do you know which?