What do “ask” and “bid” mean? I assume one has to do with the price a consumer pays, and the other has to do with how much a consumer receives for selling it.
Also, what does a huge difference between ask & bid prices indicate? I once saw bitcoins at $14 ask and $4000 bid (or something very similar).
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A bid is how much the last quote was for someone wishing to purchase the item (the amount they are willing to pay).
An ask is how much the last quote was for someone wishing to sell the item (how much they are demanding for the product).
Buyers put in bids, sellers put in asks. Traders, and banks, do both.
The bids and asks are usually submitted through some type of system, like ICE (intercontinental exchange). Sometimes, however, the process is much less structured and traders work with brokers via phones, IMs, emails, etc. Sometimes, there are both electronic systems and informal broker markets.
The difference between the bid and the ask is called the spread.
A very large spread is indicative of an illiquid market - that is to say a market where the volume of transactions is relatively low.
Ask is what someone is willing to accept as payment for that commodity/stock/whatever - bid is what someone is willing to pay.
Usually you see this as one number - the highest bid and the lowest ask. When the two are the same (or the bid is higher than the ask) - a trade takes place.
Sometimes you can see multiple bids/asks - this sort of let’s you know the “depth” of the supply and demand.
Sometimes after a market is closed - or it is traded really thin - you will see ridiculously high asks or low bids. Generally when the two prices are close - it indicates a more “liquid” market.
Instead of last, what I should have wrote is highest (for bid) or lowest (for ask) unstruck quote.
Totally unrelated to that slip on my part, a useful data point is called the ‘last’ - it’s the last price at which a trade was executed at. It’s not always available, but for an illiquid market, it’s a good way to see which way the spread is converging.
Most likely you have the ask and bid reversed here.