Bid Offer is an invisible matching system for buying and selling that affects your wallet.

2026-02-24 13:30:02

When you open a trading app and see a stock price of $173, you might think that’s the actual price of the stock. But in reality, bid offer is the hidden pricing system behind the scenes, which determines how much you actually pay when buying and how much you receive when selling. This system isn’t an official price setting but a market-driven quote based on supply and demand at each moment.

Bid Offer: The system that determines how accurate your profit or loss is

Bid price is the maximum amount a buyer is willing to pay right now, while Offer price is the minimum amount a seller is willing to accept. The difference between them is the spread, which is the cost that brokers or intermediaries collect from your transactions.

For example, if you see Stock A with a Bid of 100 baht and an Offer of 100.50 baht, it means:

If you want to sell now, you’ll get the Bid price = 100 baht
If you want to buy now, you’ll pay the Offer price = 100.50 baht
The 0.50 baht spread is the intermediary’s profit

Sellers are affected by the Bid price; buyers are affected by the Offer price

Bid is the price sellers must accept. When you want to sell an asset, you always receive the Bid price. The problem is, the Bid often is lower than the current market price you see because it only reflects what buyers are willing to pay at that moment. If the market rises, demand drops, and the Bid price decreases, meaning you might get less than expected.

Offer is the cost buyers must pay. When buying, you pay the Offer price, which is usually higher than the Bid. The wider the spread, the more you lose when entering a position. Sometimes, assets with low liquidity (less frequent trading) have wider spreads, increasing entry costs significantly.

Why traders must always be aware of Bid Offer

Current supply and demand determine the Bid-Offer every second:

When demand > supply (more buyers than sellers), both Bid and Offer tend to rise
When supply > demand (more sellers than buyers), both tend to fall

These numbers aren’t set by market makers or banks but result from actual trading decisions by thousands of investors. This makes Bid-Offer dynamic and a true reflection of market conditions.

The width of Bid-Offer indicates market liquidity

When viewing Bid-Offer in your app, remember these patterns:

Narrow Bid + Narrow Offer: An uptrend but low volume; traders haven’t entered heavily yet. If buying continues, watch for upward movement as volume increases.

Narrow Bid + Wide Offer: Large sellers are preparing to place big sell orders (Offer prices rising). Continuous buying during this phase could signal sellers giving in.

Wide Bid + Narrow Offer: Usually at the end of an uptrend; buying continues but prices move little, indicating potential trend weakening.

Wide Bid + Wide Offer: Highest volume; if at trend start or breakout, prices may surge. If at trend end, it warns to be cautious.

Key differences between Bid and Offer

Indicator	Bid Price	Offer Price
Meaning	Highest price buyers are willing to pay	Lowest price sellers are willing to accept
Typical relation	Usually lower than Offer	Usually higher than Bid
Who benefits?	Sellers (if you sell)	Buyers (if you buy)
Reflects	Demand for the asset	Supply of the asset
Market rising	Bid increases	Offer increases more than Bid
Market falling	Bid decreases rapidly	Offer decreases but slower than Bid

Bid-Offer constantly changes

Bid and Offer update every second based on current supply and demand. That’s why traders with similar views can get different prices at different moments. For example, at 10:00:00, the Offer might be 100.50 baht; at 10:00:01, it could be 100.60 baht due to increased demand.

When demand exceeds supply, both Bid and Offer tend to move upward gradually or sometimes spike sharply. Conversely, when supply floods the market, both move down, and high trading volume narrows the spread as more traders enter.

Real-life example: Somsak’s lesson with Bid-Offer

Somsak is a retail investor wanting to buy Stock A. He sees the current price at $173 in his app and thinks, “Good price, I’ll buy 10 shares = $1,730.”

But when he places a limit order at $173, his order doesn’t fill immediately. Why? Because the $173 he sees is the Bid price (the old buy offer), while the Offer price (what he must pay) is actually $173.10.

He lowers his order to match the current Offer, and it fills at $173.10, costing him $1,731. Somsak then realizes the real Bid-Offer difference—about 0.06%. It seems small, but buying and selling 10 times a month could cost him a lot of money unnecessarily.

Summary: Why Bid Offer is essential for traders

Bid Offer isn’t complicated; it’s just a matching system based on supply and demand. Its efficiency is crucial because every time you enter or exit a position, you pay the spread as a cost.

Large assets like AAPL or BTC with high trading volume can have spreads as narrow as 0.01%. Smaller stocks or bonds might have spreads of 2-3%, significantly increasing entry costs.

Investing in the stock market has proven to generate returns, but understanding Bid Offer is vital. Mastering how to read Bid-Offer spreads makes you a smarter trader and helps avoid unnecessary losses.

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