Chapter 04 · Section 4.1
Quotes
In order to facilitate the trading process, it is usual on many exchanges for dealers to display two-way quotes: two prices, one to buy and one to sell for the same option series. Which of the following is a reasonable two-way quote?
a) Bid 100, Ask 103
b) Bid 103, Ask 103
c) Bid 103, Ask 100
A bid is a buy quote. An ask (also called offer) is a sell quote.
Whoever trades for a profit is interested in selling at a higher price than buying.