Episode 01 · Beginner · 6 min read
What is a price? Last price, bid and ask explained
The price you see is the last trade. Buying now costs the ask, selling now gets the bid. A real order book, and the gap measured kind by kind.
What is the price of a stock or a bitcoin?
The price you see is the last trade: the last moment a buyer and a seller agreed. To buy right now you pay the lowest price a seller asks (the ask); to sell right now you get the highest price a buyer bids (the bid).
The price on your screen is already in the past
Every chart and every trading app shows the last price: the price of the most recent trade. It might be a second old, or an hour old on a quiet market. It tells you where two people agreed. It does not tell you what you will pay.
Two prices wait at every moment
At any moment, a market has two prices waiting:
- The bid: the highest price a buyer is offering right now.
- The ask: the lowest price a seller will accept right now.
The ask is always above the bid. If a buyer offered as much as a seller asked, they would trade at once and both orders would disappear. What stays waiting is always a bid below an ask.
All the waiting bids and asks together are the order book. Below is a real one, saved from the bitcoin perpetual future on OKX (a crypto perpetual). Press the two buttons.
Sellers (asks)
Buyers (bids)
Buy now: you pay the lowest ask, 77,966.1. Sell now: you get the highest bid, 77,966.0.
Why you buy a little higher and sell a little lower
"Buy now" (a market order) takes the cheapest ask. "Sell now" takes the highest bid. So if you bought and sold straight back, you would lose the gap between the two. That gap is the bid–ask spread, and you pay it on every trade, before any fee. It is one of the costs we add to every strategy we test.
The gap looks tiny on one trade. You pay it every time you enter and exit, so on many trades it adds up.
How big is the gap? Market kind by market kind
We measured it live on OKX for three kinds of market: crypto perpetuals, stocks (contracts that follow the S&P 500 and the Nasdaq) and commodities (gold, silver, oil). Forex is not traded on OKX, so we did not measure it.
Not measured: Forex is not traded on OKX: no order book in our data.
How it was measured
OKX public tickers (BTC, ETH, SPY, QQQ, XAU, XAG, BZ, CL perpetuals), median of each market's spread over the snapshots, then the median per kind. Chart: lab BTC-USDT-SWAP 1h candles.
This is one sample of about a minute on one day, on OKX contracts. On a stock broker, the gap on the same index can be different, and on every market it changes during the day.
Flip the cards
Tap a card to flip it
Quick check
You press "Buy now". Which price do you pay?
Questions people ask
Is the bid or the ask the price I pay?
When you buy at market, you pay the ask. When you sell at market, you receive the bid.
Why is the ask always higher than the bid?
If a buyer offered as much as a seller asked, the two would trade at once and leave the book. The orders still waiting are always a bid below an ask.
Which price does a chart show?
Most charts draw the last traded price. Some platforms draw the bid or the middle of bid and ask instead; the chart settings say which.
Can I avoid paying the spread?
A limit order waits in the book at your own price instead of taking the other side, but it may never be filled. The episode on market and limit orders explains the trade-off.
Is the spread the same on every market?
No. The box above shows it market kind by market kind, and it changes during the day.
Next in Market Basics: who is on the other side of your trade, an exchange or a broker? Ready to test a trading idea on real data? Start with Trading from Zero.
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Education about how markets and tests work. Not financial advice.