I’ve been studying bid-ask spreads. A clear example from daily trading would help me understand better.
Please share your thoughts.
Real-world bid-ask example? Let’s take Apple stock.
Last time I checked, AAPL had a bid of $177.50 and an ask of $177.52. That’s a tight $0.02 spread, showing it’s highly liquid.
Remember, wider spreads usually mean less liquidity and potentially higher costs when trading.
Traded Tesla yesterday. Bid $250.10, ask $250.15. Tiny spread, easy to get in and out. Made $500 on a quick scalp.
Forget about textbook examples. Here’s a real one from my trading yesterday:
EUR/USD
Bid: 1.0850
Ask: 1.0852
Spread: 2 pips
This tiny spread is why I love forex majors. You can enter and exit without losing much to the spread.
Compare that to some stocks I’ve traded. Once saw a small-cap with a bid of $2.50 and ask of $2.75. That’s a 10% spread right there, eating into your profits before you even start.
Key takeaway: Always check the spread before trading. It’s a hidden cost many newbies overlook.
Bid-ask example:
• Stock XYZ
• Bid: $50.00 (buyers)
• Ask: $50.05 (sellers)
• Spread: $0.05
Tighter spreads indicate higher liquidity.
Back when I started, I got burned on a penny stock with a huge spread. Bid was $0.50, ask $0.75.
Learned the hard way about slippage and liquidity. Now I stick to major pairs in forex. EUR/USD typically has a spread under 1 pip.
Last month, I caught a nice trend using limit orders right at the bid. Patience paid off big time.