The best bid is simply the highest price that buyers are willing to pay for the stock. The best ask is the lowest price at which sellers are disposed to sell. The combination of the best bid and ask for a given security is also referred to as the inside market or the inside quote. If you were to buy Intel shares at the market, you would pay the best ask, that being the most attractive price offered by sellers of the stock. The difference between the bid and the ask is called the bid-ask spread.
Spreads vary with market conditions.
Whenever an online trader or investor buys a stock, someone in the market profits from the spread in exchange for handling your order. Here s how it works. If your brokerage deals in that stock, its trading desk will take the other side of the trade. If not, it will route your order to another brokerage or trading firm that makes a market in your stock. In any event, your order goes to a trading desk with direct access to the market.