The term “Ask” in stock trading refers to the minimum price that a seller is willing to accept for a security. It’s also commonly referred to as the “ask price”. This price is determined by the seller and can fluctuate based on the market demand and the number of shares of the security available for trading. In simpler terms, it is the price at which the seller is willing to part with his/her shares.
Each publicly traded company has its own ask price, dictated by the market’s opinion on the company’s worth. When you’re considering buying a stock, the ask price gives you an idea of what you can expect to pay for each share.
Often, you’ll see ‘ask’ listed alongside ‘bid’, which is the highest price a buyer is willing to pay for a security. The difference between the bid price and the ask price is known as the bid-ask spread. The spread can give traders a sense of the supply and demand for a security and the overall market liquidity. Hence, understanding the ask price is crucial in making informed trading decisions.
Remember, the ask price is not a guarantee of purchase. If there are no willing buyers at the ask price, the seller may need to lower it to complete the transaction.
