The ask price is the highest price that a buyer is willing to pay for a stock. The bid price is the lowest price that a seller is willing to accept for a stock. The difference between the ask price and the bid price is called the spread.
When a buyer and seller agree on a price, a trade is executed. The trade price is usually between the ask price and the bid price. The closer the trade price is to the ask price, the better the deal for the buyer. The closer the trade price is to the bid price, the better the deal for the seller.
The ask price and the bid price are constantly changing as buyers and sellers enter and exit the market. The ask price will generally rise if there are more buyers than sellers, and the bid price will generally fall if there are more sellers than buyers.
The ask price and the bid price are important indicators of the supply and demand for a stock. A high ask price and a low bid price indicate that there are more buyers than sellers, which is bullish for the stock. A low ask price and a high bid price indicate that there are more sellers than buyers, which is bearish for the stock.