Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Left-Hand Side

What it is:

The left-hand side of a stock quote is the bid.

How it works (Example):

A bid-ask is a quote that reflects the security’s bid price and its ask price. If, for example, the bid-ask for Company XYZ stock is $50 - $50.25, the left-hand side is $50.

The left-hand side of a quote represents the highest a person is willing to pay for the security at that time. The difference between the left-hand side and the right-hand side (the ask) is called the spread.

Typically, a trader or specialist on the floor of the New York Stock Exchange would quote the bid-ask spread as follows:

50-50-1/4
Note that online trading systems might refer to the bid-ask spread as “BxA” rather than left-hand or right-hand.

There may be several bid prices and several ask prices for a security at any point in time. However, only the best bid (that is, the highest left-hand side) and the best ask (that is, the lowest right-hand side) are used to calculate the bid-ask spread.

Why it Matters:

It is important to remember one key aspect of bid and ask prices: Purchasers pay the right-hand side and sellers receive the left-hand side. This nuance is why securities dealers make a profit on bid-ask spreads: Their job is to buy stocks at the ask price and sell at the bid price.

Many traders and analysts scrutinize patterns in bid-ask spreads to understand what prices trigger demand for both sellers and buyers. Other traders and analysts feel that the bid-ask spread itself has little predictive value.

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