As in any market, in stock exchange there are a lot of buyers and sellers. The Bid Rate is the bidding price at which the buyer is ready to buy a particular share. The ask rate is the asking price at which the seller is ready to sell his shares. Since the buyer wishes to buy at a lower price an the seller will wish to sell at a higher price, the bid rate would be lower than the ask rate. Whenever, the bid rate and the ask rate match, a trade is executed. The rate at which the last trade gets executed is known as the Last Traded Price or LTP.
The best bid price is the highest bid rate at which the buyers are willing to buy the shares and best ask rate is the lowest ask rate at which the seller is willing to sell. The difference between the best bid price and the best ask rate is known as the “BID – ASK” spread. The bid-ask spread is inversely related to the liquidity in the market. The lower the rate the higher is the liquidity and vice versa. The minimum rate for Currency is 0.25 paisa, for BSE it’s 1 paisa and for NSE it’s 5 paisa. In theory the maximum bid ask rate can be unlimited, however on exchanges it would be the difference between the circuit filters set by the exchanges.
At one point of time the exchange normally display only the top 5 bid rates and ask rates known as the top 5 quotes. To check the Top 5 Quotes of a particular scrip, select the scrip and press the short cut key “F6” or double click on the scrip. This shall open the Snap Quote Dialog Window.
The blue quotes on the left side are the bid or the BEST buying rates and the red quotes on the left are the ask price or the BEST selling rates. It also shows various other information like the Last Traded Price and Quantity, Total Buy Quantity and Total Sell Quantity, Volume, ATP, 52 Week high and 52 Week Low, Open Interest etc.
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