In trading, the term offer refers the price at which the owner of an asset is willing to sell that asset. It is also referred to as the ask price because it is the price which an asset’s owner is asking for their asset.
Example: A bureau de change buys U.S. dollars from customers for 5 centimes less per dollar than the U.S. dollar to Swiss franc interbank rate and sells them to customers at 5 centimes more than the interbank rate. So the bureau de change is bidding 5 cents less than the interbank rate for customer dollars and offering dollars to customers for 5 cents more than the interbank rate – a bid-ask spread of 10 centimes.
In the case of stocks, the offer is the price at which shareholders are willing to sell their shares on the stock market. The bid is the price which investors are willing to pay for shares. In the case of real estate or any other material asset, the offer is the price which owners are asking for their property, while the bid is the price which prospective buyers are offering for that property.
In almost every case, the offer is higher than the bid.
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