Bid and Ask: What Every Aussie Investor Needs to Know (2025 Guide)

For many Australians dipping their toes into shares, ETFs, or even crypto, the terms ‘bid’ and ‘ask’ can sound like jargon. Yet these two numbers are central to every market trade, affecting everything from the price you pay for BHP shares to how much you get back selling Bitcoin. Understanding bid and ask isn’t just for day traders—it’s a must for anyone wanting to invest smarter in 2025.

What Are Bid and Ask Prices?

At its core, every trade on the ASX, Chi-X, or any global exchange boils down to buyers and sellers. The bid price is the highest price a buyer is willing to pay for an asset, while the ask price (sometimes called the offer) is the lowest price a seller is willing to accept. The difference between these two is known as the spread.

• Bid: What buyers are offering

• Ask: What sellers want

• Spread: The gap between the two

For example, if you’re buying shares in Commonwealth Bank (CBA) and the current bid is $120.10, while the ask is $120.15, the spread is 5 cents. The tighter the spread, the more ‘liquid’ the asset—meaning it’s easier and cheaper to trade.

Why the Spread Matters in 2025

The bid-ask spread isn’t just trivia for market geeks. It’s a hidden cost that impacts every investor’s return. In 2025, with trading volumes high and technology-driven market makers more active than ever, most blue-chip shares have very tight spreads. However, less-traded stocks, microcaps, and some ETFs can still have surprisingly wide spreads—sometimes several cents or even dollars apart.

Here’s why that matters:

• Transaction Costs: Every time you buy at the ask and sell at the bid, you ‘lose’ the spread—on top of brokerage fees.

• Liquidity: Tighter spreads mean you can buy and sell quickly without moving the market. Wide spreads can make it harder to exit a position at a fair price.

• Market Volatility: During sharp market moves (think the 2020 COVID crash or the 2024 tech rally), spreads can widen dramatically, making trading more expensive and risky.

In June 2025, the ASX introduced new ‘tick size’ rules for small-cap shares, reducing the minimum price movement to help tighten spreads. This policy shift aims to make trading fairer for retail investors, but it’s still crucial to check the spread before placing any order—especially on less-liquid stocks or ETFs.

Real-World Examples: From Shares to Crypto

Let’s bring this home with a few real Australian examples:

• ASX Blue-Chip: CSL Limited (CSL) typically has a bid-ask spread of just 1–2 cents, even though the share price is above $280. High liquidity and constant trading keep the spread tight.

• Small-Cap Stock: A microcap mining explorer might have a bid at 10.5c and an ask at 12c—a 14% spread! That’s a huge cost if you’re not patient.

• ETFs: Popular ETFs like VAS (Vanguard Australian Shares) have tight spreads, but niche thematic ETFs or those with low trading volumes can be much wider.

• Crypto Exchanges: On Australian platforms like Independent Reserve, the bid-ask spread for Bitcoin is typically under 0.2%, but altcoins can be much higher. Spreads can also widen on weekends or during market turbulence.

Tip: Always check the ‘market depth’ or ‘order book’ screen in your trading app. This shows real-time bid and ask levels so you can avoid paying over the odds.

How to Use Bid and Ask to Your Advantage

Knowing how the bid and ask work can give you an edge in 2025’s fast-moving markets. Here are some practical strategies:

• Use Limit Orders: Instead of buying at market price, set a limit order at your desired bid or ask. This can save you money—especially on wide-spread stocks.

• Time Your Trades: Trade during peak market hours (10am–4pm AEST) when spreads are tightest. Avoid after-hours or illiquid sessions.

• Watch Market Depth: Deep order books mean tighter spreads and less slippage.

• Be Patient: For less liquid assets, don’t chase the ask. Place your bid and wait for sellers to meet you.

Conclusion: Every Aussie Investor Should Master the Spread

The bid and ask are more than just numbers—they’re the heartbeat of every market. Whether you’re trading shares, ETFs, or crypto, understanding these prices (and the spread between them) can save you money, improve your returns, and help you avoid costly mistakes. With 2025’s market changes making some trades cheaper but others trickier, it pays to know the basics and use them to your advantage.