Whose side is shown
Bid is the price at which a participant offers to buy. Ask, or offer, is the price offered for sale. The best bid is the highest available buying price and the best ask the lowest available selling price in the book. For someone seeking an immediate purchase, the opposing side is sellers, not other buyers. For an immediate sale, the reverse applies. Because the perspective changes, a table label such as “buy” is easy to misread: establish whether it describes the order side or the user’s action.
The difference between best ask and best bid is the spread. Investor.gov treats the bid–ask spread as a separate transaction cost for exchange-traded funds.[5](#source-cm-etf) It is not necessarily a broker commission: no separate recipient called “the spread” receives a payment. The difference arises from opposing offers. Commissions, taxes and other costs are additional. A narrow spread also proves nothing about business quality, capital safety or future return.
Example with an explicit base
Suppose the best bid is 100 roubles and the best ask is 102 roubles. The absolute spread is 2 roubles. The midpoint is 101 roubles, and the spread relative to that midpoint is about 1.9802%. This depends on the selected base: dividing by bid or ask gives another relative measure. State the denominator. The midpoint is useful for comparison, but it is not an order and does not mean a counterparty must execute at 101.
If at least 20 securities are available at both best prices, a conditional immediate purchase of 20 at 102 followed by a sale at 100 creates a 40-rouble difference before commissions. The example assumes the book is unchanged between actions. It illustrates a mechanism, not a suggested round trip. In practice volume can disappear, prices can move and fills can occur at different levels.
The book is a snapshot, not the whole market
A book may show only a limited number of levels or a displayed portion of interest. Display rules, data latency, volume units and trading regime matter. One hundred shares and one hundred lots are different quantities. Establish lot size and quotation method before multiplying price by volume. A bond quoted as a percentage of face value needs a separate cash conversion, and [accrued interest](/guides/accrued-interest/) may increase the full settlement amount.
Do not read order counts as a vote on tomorrow’s price. Intentions may be cancelled, opposing orders may execute and new participants may appear. Even a large visible imbalance does not establish the future result. The practical question is: what prices and quantities are available in this snapshot, and what changes if a given volume is run through it? The [settlement route](/guides/exchange-and-settlement/) covers infrastructure, and the [financial-series guide](/guides/chart-literacy/) covers chart limits.
Read the snapshot without overclaiming
Test the claim that an attractive midpoint lets a participant transact there. The source data do not establish that. A midpoint is a calculation, not an order. A past trade at that price does not create a current offer. Distinguish an observed price, displayed willingness to buy or sell and confirmed execution. Skipping this distinction can make mathematically correct price-times-volume arithmetic an incorrect estimate of available cash.
Try swapping the sides. For an immediate sale, find buyer bids rather than choosing an attractive seller ask. Then ask whether quantity is sufficient and units match the package size. If quantity is unknown, the result remains conditional. With delayed data, the assumption that the book is unchanged is especially strong. Record which prices were used and why they correspond to the action.