ASK price BID price and Spread

The terms Ask and Bid refer to a two-way price quotation that reflect the best potential price at which an instrument can be bought or sold at any given point in time.

Ask price - the best price at which an instrument can be bought

Bid price - the best price at which an instrument can be sold

The difference between the Ask and Bid prices , created by market participants is know as Spread . Spread is a key indicator of the liquidity of an asset and as rule,the higher the liquidity of an asset, the smaller the Spread.

The bid-ask Spread can widen dramatically during periods of low market liquidity or market turmoil, since traders will not be willing to pay a price beyond a certain threshold, and sellers may not be willing to accept prices below a certain level.

When trading on the market Spread will tend to increase/decrease depending on the size of your order. For example, a larger market order will require more liquidity from the order book than a smaller order. In other words, the larger your order, the larger the Spread will tend to be.