Thursday, July 23, 2015

Term of the Day: Touchline

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July 23, 2015
Touchline

The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing to sell, at a given time in the trading day. The touchline therefore specifies the best bid or ask for a particular security at any point in time. Very liquid securities will generally have a narrow bid-ask spread, while illiquid securities will have a wide spread.

Investopedia Explains:

For example, if security A has various buyers who are bidding $5, $5.10 and $5.15 for it, the touchline bid price would be...

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