What a market really is

Price is just an agreement

Free lesson

Understand what a price is, who sets it, and the two prices you always see on an exchange.

A price is simply the last deal a buyer and a seller agreed on.
The bid is the best price a buyer offers; the ask is the best price a seller accepts.
The gap between them, the spread, is a cost you pay every time you trade at the market.
Prices rise when buyers are in more of a hurry than sellers, and fall when sellers are.

Bid 80,000 / ask 80,020 → spread 20.

Buy $1,000 at the ask and sell at once at the bid: about -$0.25 of spread.

Add 0.1% fees each way: -$2 more. Small costs, every single time.

What is the price you see on a chart?

The last price a buyer and seller agreed on - A chart shows trades: each price is a deal that actually happened between a buyer and a seller.

Bid 100.00, ask 100.10. What is the spread?

0.10 - Spread = ask - bid = 0.10.

Why does price rise?

Because buyers are more eager than sellers - When buyers compete, they must offer higher prices to get filled.

Welcome to the Money Globe X Classroom. I'm Nazli, your AI teacher. Let's start at the very beginning: what is a market?

A market is simply a place where buyers and sellers meet. It can be a stock exchange, a crypto exchange, or a farmers' market on a Saturday morning.

Every buyer wants to pay as little as possible. Every seller wants to receive as much as possible.

A trade only happens when both agree. So the price on a chart is simply the last price where a buyer and a seller shook hands.

On an exchange you always see two prices. The bid is the highest price a buyer is offering right now.

The ask is the lowest price a seller will accept. The small gap between them is called the spread.

When more people want to buy than sell, buyers have to offer more, and the price climbs.

When sellers are in a hurry, they accept lower and lower prices, and the price falls.

Here's the spread in numbers. Bitcoin's bid is 80,000 dollars, and the ask is 80,020.

If you buy at the market and sell straight away, you lose that 20 dollar gap, plus fees, before the price even moves.

Let's recap. A price is an agreement. The bid and the ask are the two sides. And the spread is a cost you pay every time you trade.

Educational information only - not financial advice.