3.3 Quotes, Spreads & Trade Size
Securities quotes define the two-sided market prices and share volumes available for trade execution.
Key FINRA Exam Takeaways
- Bid Price: Price the market maker/dealer pays to buy; price the customer receives when selling.
- Ask / Offer Price: Price the dealer charges to sell; price the customer pays when buying.
- Spread: Ask minus Bid (dealer's compensation margin).
- Quote Size: Quoted in round lots (1 lot = 100 shares). A quote of '45.10 - 45.25 (5 × 10)' means Bid $45.10 for 500 shares, Ask $45.25 for 1,000 shares.
Interactive Knowledge Checkpoint • Section 3.3
A stock quote reads: 22.50 - 22.65 (3 × 4). If a customer enters a market order to BUY 100 shares, what price will the customer pay (excluding commission)?