http://money.stackexchange.com/questions/15572/doe

http://money.stackexchange.com/questions/1557...-ask-price.



EVERYONE buys at the ask price and sells at the bid price (no matter who you are).

There are a few important things you need to understand.

An order executes ONLY when both bid and ask meet. (bid = ask)
when buying at "market price" = YOUR bid is the lowest ask price on the market.
when selling at "market price" = YOUR ask is the highest bid price on the market.
Example:

EVE bid: 16.00

EVE ask: 16.25

So if your selling EVE at "market price" you are entering an ask equal to the highest bid ($16.00).

If you buy EVE at "market price" you are entering a bid equal to the lowest ask price ($16.25).

Its key to understand this rule: "An order executes ONLY when both bid and ask meet. (bid = ask)."

So a market maker puts in a bid when he wants to buy but the trade only executes when an ASK price meets his BID price.

When you see a quote for a stock it is the price of the last trade. So it is possible to have a quote higher or lower then both the bid and the ask.