Placing Orders

Placing Orders

The price buyers are willing to pay is called the bid. The price sellers are asking is called the ask. And the distance between the two is called the spread.

The price buyers are willing to pay is called the bid. The price sellers are asking is called the ask. And the distance between the two is called the spread. If you believe the price is going to go up, you would buy a long position, and then look to close it by selling when the higher price is reached. If instead you think the price will go down, you would sell and enter into a short position. The idea then is to cover your position by buying back at a lower price.

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