I've just noticed that many people still don't understand the difference between Bid and Offer, even though this is very important if you want to trade stocks or securities intelligently.



Let's explain it simply: Bid is the price that a buyer is willing to pay for a product, while Offer is the price that a seller intends to sell at. These two numbers are not fixed; they change all the time based on market supply and demand. If more people want to buy, the Bid and Offer prices will move up. But if more people want to sell, both prices will go down.

Why should you care about this? Because it tells us what the market is doing. Buyers offering high Bids indicate they believe the stock will go up, while low Offers mean sellers are eager to sell. The difference between the two prices (called the spread) also indicates the liquidity of the asset.

In real stock markets, the Offer price is usually higher than the Bid because sellers want to get more money, while buyers want to pay the least. It's a natural negotiation. For example, if the Bid is 100 baht, the Offer might be 101 baht. A narrow spread indicates high trading activity and good market liquidity.

But if the Bid and Offer are far apart, it might mean that the stock isn't traded much or the market lacks confidence. In such cases, sellers may have to wait a long time to sell or lower their prices.

There are also techniques to observe: if the Bid and Offer are narrow, it shows a trend but no volume yet because no one is trading. If the Bid is narrow but the Offer is wide, it indicates that large investors are preparing. When the Bid is wide and the Offer is narrow, it usually happens at the end of a trend. Both Bid and Offer being wide suggests maximum volume.

Remember, Bid and Offer are tools that help us better understand the market, especially when deciding to buy or sell securities. Highly liquid securities, like large-cap stocks, tend to have narrow spreads, while small-cap or niche securities may have more noticeable spreads. Understanding this well will definitely help you trade more wisely.
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