I just noticed that beginners in the stock market often get confused about bid and offer. In fact, it’s not as difficult as you think—but if you don’t understand it, you’ll miss many opportunities.

Let’s start with the basics. **Bid** is the price a buyer is willing to pay, while **offer** (also called **ask**) is the price a seller is willing to accept. The difference between **bid** and **offer** is called the **spread**, and it’s very important in trading because it’s the cost you must pay when you buy or sell securities.

Think of it this way: bid and offer change all the time based on supply and demand. If people want to buy more than they want to sell, the bid price will rise. If people want to sell more than they want to buy, the offer price will fall. This is what drives the market.

For viewing bid and offer, there’s one technique to consider. For example, if you see a **narrow bid** and a **narrow offer**, it usually means there’s a trend but there isn’t much volume yet, because not enough people have started trading. If you see a **narrow bid** and a **wide offer**, it often means large investors are already preparing—so keep an eye on it, because the offer price is likely to keep increasing.

Bid and offer are much more useful for trading than you might think. If you use a **market order**, it will execute at the current bid/offer price. **Limit orders** and **stop loss** also depend on the bid/offer price levels you set.

The advantage of understanding bid and offer is that you can tell how much interest there is in that security. A higher bid means buyers are willing to pay more—that’s a good sign. In a bear market, bid and offer are often much wider because there are more sellers than buyers.

There are also drawbacks. For one thing, the bid is always lower than the offer. Sometimes that gets in the way of completing transactions. Sellers might refuse to sell at the bid price they’re being offered. And in new markets where millions of transactions happen every day, buyers and sellers can’t contact each other directly.

In addition, the offer price is often higher than the current market price. If you buy, you have to pay extra. Some beginners don’t know this and get shocked when the final price they pay turns out to be higher than expected.

Here’s another interesting point. If the bid is wide but the offer is narrow, it often happens toward the end of a trend. In that case, prices usually don’t move much. A wide bid and a wide offer indicate the peak of trading volume. If it occurs at the start of a trend, the price may surge—but if it happens at the end of a trend, you should avoid it.

Let’s look at a real example. Somsak wants to buy stock A at a price of **173 dollars**. He buys **10 shares**, thinking the cost will be **1730 dollars**, but he ends up paying **1731 dollars**. He’s confused about why. The **173 dollars** price he sees is the bid price from the latest trade, but he has to pay the **173.10 dollars** offer price. That’s the spread.

In summary, bid and offer are fundamentals you need to understand if you want to trade seriously. Especially for less liquid securities: large-cap stocks may have narrow spreads, but small-cap stocks—or certain bonds—can have spreads that are clearly noticeable. Investing in the stock market is a good way to generate income, but you need time to learn and truly understand how the market works.