The term bid and ask (also known as bid and offer) refers to a two-way price quotation that indicates the best potential price at which an option can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share of stock or other security. The ask price represents the minimum price that a seller is willing to take for that same security. A trade or transaction occurs after the buyer and seller agree on a price for the option which is no higher than the bid and no lower than the ask.
