shares

[plasticdan]

I am just starting to deal in shares could anyone explain to me the BID and OFFER prices .

[dzug]

offer is the price you pay when buying

bid is the price you get when selling

From a US web site but I don't think it's any different here

[BigMac]

dzug is right.

The bid-offer spread is where the stock broker makes its money: selling your shares for more than it pays for them. By shopping around you can usually improve the spread a little.

The share price quoted in the press, either in a market report or the tables, is usually the mid-market price. So If a share has a Bid (price at which you can sell) price of 100 and an Offer (price at which you can buy) price of 110, then the mid-market price is 105.

If you hold shares and want to value them realistically, it makes sense to value them at the bid price - you can usually improve on it when you deal (so you'll be happy) but if you expect the mid-market price, or worse the offer price, you'll always be disappointed.

One final thing - if you are very new to dealing in shares make sure you factor in the dealing costs. If you have to pay (in the UK) say �12.50 to deal, and only want to buy �100 of shares then you have to get a 25.5% return when you sell just to break even (including UK Stamp Duty). Obviously, if you're buying/selling in larger amounts the fixed dealing costs, as a percentage, will fall.