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International Business Machines Corporation Message Board

  • dino2hootie dino2hootie Mar 19, 2013 12:01 AM Flag

    Question regarding Bid and Asking Price

    I realize this is probably pretty elementary, but can someone please explain to me who or what sets the bid and asking price. And why there is such a wide margin, such as now, between the price per share and the asking price? Thank you.

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    • supply and demand, simply put. If I am so eager to buy your stock or belongings, then your ask price will rise. On the same hand , I might not be so interested in your goods but will bid a price that might be below what you would expect to receive.This supply and demand exercise might result in a tight margin based on pressures from the buy side and sell side. This margins widens when, for example you have a snowblower for sale in very good shape, one year old. You are selling it in the winter. The demand becomes HIGH. Your asking price (ASK) is high. BID price will most probably match the ASK price, resulting in a narrow margin. If you attempt to sell this snowblower that is in great condition, in the month of July with your winter ASK price, the BID price will be appropriately lower (decreased demand) , resulting in a wide margin.

    • criminals on wall street set that

 
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