Market mechanics
Bid, ask and order type shape how a trade is attempted
The bid is the highest displayed price a buyer is offering; the ask is the lowest displayed price a seller is offering. Their difference is the spread. A market order prioritizes execution, while a limit order sets a maximum purchase price or minimum sale price. Neither order type guarantees a particular outcome in every market condition.
Explainer Reviewed 08-21-2026
What it is for
These terms help explain why a quoted last price may not be the price available for the next trade. They also make clear that execution quality depends on liquidity, order size, venue, timing and the instructions attached to the order.
What it cannot tell you
A displayed quote cannot guarantee execution, and a limit order can remain unfilled. Fast markets, trading halts and thin liquidity can change available prices. This guide is not an instruction to place a trade.
How to verify the object
Read the broker’s order-type disclosure and the venue’s trading rules. On an order ticket, confirm the security, side, quantity, order type, limit if any and time in force before submission. Use current quotes from the trading venue or broker, not screenshots.