Listen to a Business English Dialogue About Asked price
Clara: Hi Isabelle, do you know what the term “asked price” means in finance?
Isabelle: Hi Clara! Yes, the asked price is the price at which a seller is willing to sell a security or asset.
Clara: That’s right. It’s also known as the “offer price” because it’s the price at which sellers are offering to sell their assets.
Isabelle: Exactly. The asked price is typically higher than the bid price, which is the price at which buyers are willing to buy the asset.
Clara: Right. The difference between the asked price and the bid price is called the bid-ask spread.
Isabelle: Yes, and the bid-ask spread represents the cost of making a transaction in the financial markets.
Clara: That’s correct. A narrower bid-ask spread indicates a more liquid market, while a wider spread suggests lower liquidity.
Isabelle: Exactly. In highly liquid markets, the bid-ask spread tends to be smaller because there are more buyers and sellers.
Clara: Right. Market conditions and the supply and demand for the asset can also influence the size of the bid-ask spread.
Isabelle: Yes, and investors should consider the bid-ask spread when buying or selling securities to ensure they’re getting a fair price.
Clara: Absolutely. Understanding the asked price and bid-ask spread is essential for investors to make informed trading decisions.
Isabelle: Agreed. It’s an important concept in finance for anyone looking to participate in the financial markets.