Bid vs ask: what the bid, the ask and the spread mean

Every market where buyers and sellers post prices has two of them at any moment. The bid is the highest price someone is currently offering to pay; the ask is the lowest price someone is currently willing to sell at. Polymarket’s documentation puts it in one line each: bids are “buy orders — the highest prices traders are willing to pay”, asks are “sell orders — the lowest prices traders are willing to accept” (Polymarket, Prices & Orderbook).

• “Offer” is another word for the ask: the bid-offer spread and the bid-ask spread are the same thing.
• In currency trading the same two prices are often called the bid rate and the ask rate.
• The ask is always at or above the bid. If someone were willing to pay more than another will accept, the two orders would trade and disappear.

The spread is simply the ask minus the bid. To compare spreads across prices it is often expressed as a percentage, commonly of the midpoint — the average of the bid and the ask. Some sources divide by the ask instead; the difference is small when the spread is narrow.

The spread is not a fee anyone charges, but it works like one: buy at the ask and sell straight back at the bid, and you lose the spread. On a contract worth 37¢ a 6¢ spread is a large share of the price, which is why it matters more in small, thinly traded markets.

With a market order, you buy at the ask and sell at the bid. FINRA describes a market order as one that “generally will execute at or near the current bid or ask prices”, and warns that “you might not get the price you saw or were originally quoted, especially in fast-moving markets” (FINRA, Order Types).

A limit order names your price: “A buy limit order can be executed only at or below the limit price”, and a sell limit “only at or above” it. Placing a buy limit at or near the bid can save you the spread, but “there’s a chance your order doesn’t get executed at all”. Should you buy at the bid or the ask? If filling now matters more than the price, take the ask; if the price matters more and you can wait, bid and accept that you may miss the trade.

Prediction markets show the same two prices, in cents per contract. On Polymarket, the price you see is usually not one you can trade at: it is “the midpoint of the bid-ask spread”, unless the spread is wider than 10¢, in which case the last traded price is shown (Polymarket help centre). Its own example: with a 34¢ bid and a 40¢ ask the page shows 37%, but “you’ll pay the ask ($0.40) when buying or receive the bid ($0.34) when selling”.

Kalshi’s order book lists bids — “the maximum price a buyer is willing to pay” — and asks — “the minimum price that a member is willing to sell that contract for” — for both YES and NO. Its example shows YES bid 71¢ and ask 74¢, NO bid 26¢ and ask 29¢. Because a YES and a NO contract together are worth $1, and Kalshi says buying YES and selling NO are the same trade, the YES ask mirrors the NO bid (74¢ = $1 − 26¢) — our reading of Kalshi’s numbers. All orders that do not match immediately rest on the book as limit orders, and Kalshi notes there is “no guarantee a limit order will be filled”.

Spreads are narrow where many buyers and sellers compete and wide where few do. Polymarket’s documentation says it directly: “Tighter spreads mean more liquid markets.” Spreads also widen around news, when traders pull their orders rather than be caught on the wrong side. How much you can trade before the price moves against you — depth — is the other half of the story, covered in liquidity and spreads. To turn any of these prices into a probability or betting odds, use the odds to probability converter.