The bid is the highest price a buyer is willing to pay for a contract. The ask (also called the offer) is the lowest price a seller is willing to accept. The difference between the two is the bid-ask spread. On BitMEX, the best bid and best ask are displayed at the top of the order book for every contract.
What Is the Bid Price?
The bid price is the highest price that any buyer in the market is currently willing to pay for a contract. It represents the best available price at which you can sell immediately using a market order.
When you look at the order book on BitMEX, bid orders appear on the buy side. They are stacked from the highest price (best bid) at the top down to lower prices. Each bid shows a price and a quantity – the number of contracts a buyer wants to purchase at that price.
The best bid is the single highest-priced buy order in the book. It is the price you receive if you sell at market. If you place a limit sell order below the best bid, it executes immediately at the bid price or better.
Multiple bid orders can exist at the same price level. The total quantity at the best bid indicates how many contracts can be sold at that price before the next lower bid becomes the best bid.
What Is the Ask Price?
The ask price (also called the offer price) is the lowest price that any seller in the market is currently willing to accept for a contract. It represents the best available price at which you can buy immediately using a market order.
Ask orders appear on the sell side of the order book. They are stacked from the lowest price (best ask) at the top up to higher prices. Each ask shows a price and a quantity – the number of contracts available for purchase at that price.
The best ask is the single lowest-priced sell order in the book. It is the price you pay if you buy at market. If you place a limit buy order above the best ask, it executes immediately at the ask price or better.
The relationship between the bid and the ask defines the market’s tightness and liquidity. A narrow gap between the two signals a liquid, actively traded market.
What Is the Bid-Ask Spread?
The bid-ask spread is the difference between the best ask and the best bid. It is the cost of trading immediately using market orders.
Formula: Spread = Best Ask - Best Bid
Example: If the best bid on XBTUSD is $60,000 and the best ask is $60,001, the spread is $1. This means a trader who buys at market ($60,001) and immediately sells at market ($60,000) loses $1 per contract to the spread.
Why does the spread matter?
- Tight spreads (small gap) indicate high liquidity. Many buyers and sellers are competing, which keeps the spread narrow. This benefits traders because execution costs are low.
- Wide spreads (large gap) indicate low liquidity. Fewer participants are quoting, and the cost of immediate execution is higher.
On BitMEX, major contracts like XBTUSD and ETHUSDT typically have very tight spreads due to high trading volume and active market makers. Less liquid altcoin contracts may have wider spreads.
The spread is a direct trading cost. Traders who use limit orders can avoid paying the spread by placing orders at or near the best bid (when buying) or best ask (when selling), though this comes with the risk of the order not being filled.