Bid-Ask Spread

The bid is the highest price a buyer will pay to buy a specified number of shares of a stock at any given time. The ask is the lowest price at which a seller will sell the stock. The bid will almost always be lower than the ask or offer. The difference is the spread. A displayed spread is not a fill.

That is the investor.gov definition (glossary: Bid Price). Width is the cost of crossing the quote. Size is how much is posted at the inside. The same geometry appears on listed options: OIC, the bid is the highest price an investor is willing to pay, and the ask is the best price at which an investor is willing to sell. Bid size and ask size are aggregate interest at those prices, meaning shares on an equity book and contracts on an option.

Width versus fill

Width is not fill quality by itself. A one-tick spread with no size is a fragile inside. A wider spread with displayed size is a different cost. Your order type chooses which side you meet. A market order typically meets the quoted offer for a buy and the quoted bid for a sell. That is speed. It is also how you pay the displayed width, and how the executed price may not be the price you expected. A limit order names a price. A buy limit can only execute at the limit or lower; a sell limit at the limit or higher. It can rest unfilled if the limit is never reached.

Size at the inside is the other half of the quote. On stocks, that size is displayed shares. On options, it is aggregate contracts at the OPRA NBBO on the options chain. Open interest is a separate figure. If your order is larger than displayed size, the next price is part of your expected cost. Depth behind the inside is Level 2 quotes on the equity. Last sale is a print that already happened. Bid and ask are interest.

EXAMPLE: labeled $10.00 / $10.05 for illustration only, with no live prices

EXAMPLE only. Not a live quote, not a recommendation, not a typical spread. Suppose a stock’s displayed inside is $10.00 bid and $10.05 ask. Per investor.gov, the bid is the highest price a buyer will pay and the ask is the lowest price at which a seller will sell. The spread is ask minus bid: $10.05 − $10.00 = $0.05. A marketable buy of displayed size is built to pay $10.05; a marketable sell, $10.00. A buy limit at $10.02 may fill at $10.02 or lower, or may not fill. If displayed bid size is smaller than your sell, you are not entitled to $10.00 for the whole order.

Same geometry on a listed option, with contracts instead of shares. OIC: the spread is as notable as the prices themselves. Implied volatility is inverted from those premiums. Fees are not the spread. Size the underlying with dollar risk: example only, $10,000 account, 1% risk, $1.50 stop → 66 shares, round down. The risk calculator is a crypto UI; treat the unit as shares, round down.

Early, RTH, and late: thinner books, wider spreads

Continuous U.S. equity books are not one 4:00 a.m.–8:00 p.m. pool. Early 4:00 a.m. ET versus Early 7:00 a.m. ET is an exchange split (NYSE Arca Early 4:00 a.m.; NYSE / NYSE American Early 7:00 a.m.). IEX pre-market is 8:00 a.m.–9:30 a.m. ET. Regular Trading Hours are 9:30 a.m. to 4:00 p.m. ET. Late sessions are venue-specific. Overnight 9:00 p.m. to 4:00 a.m. is planned for December 6, 2026, not live as of this glossary (August 25, 2026). The map is U.S. stock market session hours 2026. Broker overnight is ATS access, not exchange overnight.

Off-core books are typically thinner than RTH. Thinner means less displayed size at the inside and, often, a wider displayed spread. That is a character statement, not a penny table. If the book you are looking at is pre-market or late, you are not entitled to RTH width. Pre-market trading is the equity-hours companion; do not flatten it into one clock. Cboe C1 equity-options GTH is TBA. Do not mix that clock with the regular-hours stock market.

What you won't find here

Not a live NBBO, not a scanner, and not a table of typical cents. Not a fill guarantee. Not overnight as live, and not C1 equity-options GTH as live. The $10.00 / $10.05 row is a labeled example.

FAQ

How is the bid-ask spread calculated?

Ask minus bid. Investor.gov: the difference between the bid price and the ask price is the spread. In the labeled example, $10.05 ask minus $10.00 bid is $0.05. That example is not a live session and not a typical penny width.

Does a narrow spread guarantee a fill?

No. Width is one fact. Size at the inside is another. A marketable order can still slip if size is thin or the quote updates. A limit can miss.

Are early and late spreads the same as RTH?

Usually not in character. Early and late books are typically thinner, which often means a wider displayed spread. Early is a 4:00 a.m. versus 7:00 a.m. exchange split.

Does the same definition apply to listed options?

The investor.gov definition is stated on stock shares. OIC applies bid, ask, size, and spread to the option chain, where OPRA collates those prices into the NBBO.

Is last sale the spread?

No. Last is a print that already happened. Bid and ask are displayed interest. Level 2 is depth behind that interest. Use last for what traded; use bid/ask for what it costs to trade next.

Educational only. Not financial, tax, or legal advice. Bid, ask, and spread follow investor.gov Bid Price. Option bid/ask language follows OIC (August 2024). Equity session clocks follow the 2026 hours map as of August 25, 2026 and can change. Trading stocks and listed options can result in loss of capital.