Okay before I ask this question let me clarify something for those that don't me, I am a coin collector and not a buyer/ seller of precious metals. When a person is going to buy or sell a stock one can look at the bid/ask price and know what they will be selling for or buying for. Sometimes one can buy for maybe a 1/4 pointl less than listed. Anyway that has been my experience with stocks. If I remember correctly with what I have learned here the silver bid/ask price is for 1000 ounze bars, is that not correct? I guess what I'm asking is what is the significance of the bid/ask price that Kitco displays? Also it appears is always 4 to 5 cents apart (Silver) while stock bid/ask differences flucuate much more. It appears to me you have to find someone to actually post a price or give one a price to buy or sell PMs. Is this because physical silver prices are not as controlled as stocks, futures, and the like? Would someone please have the patience to explain this to me please?
the difference is what the broker makes by doing the transaction it's called the spread. The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it. bid is what you sell it at , ask is what you buy it at. not too sure if I answered your question.
The spread I do understand and it is very applicable with stocks, but I don't see the importance or even use when it comes to PMs. But, thanks for the reply.
You can buy digital PM from brokers. This is great for the day trader. XAG/USD is as much as a currency pair as AUD/JPY it can be traded on the minute or second scale it's as much a medium for speculation as any other.
As a coin collector, don't coin dealers sell coins at a higher price than they buy them? Isn't there a rule of thumb % difference between how much the dealer will purchase a coin and the price the dealer will sell the same coin? That's the spread...it's what enables the coin dealer to pay the rent, eat and advertise their coins. Almost everything has a bid and ask price. If you buy a new car and decide after 100 miles of driving that you don't want it, how much will the dealer buy your new car back? That's the spread. If you go online to the large PM dealers they list the price that they will pay for an item and what they charge for the very same item. They even provide lower selling prices for large quantity purchases, but those prices are never equal to what they will buy the items for...The Spread. Hope this helps. You are probably familiar with the concept but not the term.
Yes you can. But only when the seller is willing to accept your lower price. Same thing happens with metals as well. The price of silver, gold whatever is always quoted as a given number at any given moment. That number is the spot price. Bid is usually below the current spot - Ask is above the current spot. There's a reason for this. It's because the people Bidding typically think the spot is going to go down and the people Asking think it's going to go up. But at any given moment, just like with stocks, if a buyer suddenly decides that he is willing to change his mind he will agree to pay the Ask. Or - a sell can suddenly change his mind and agree to accept the current Bid - just like with stocks. Most people tend to base their decisions on their emotions at any given moment - so they change their minds rather often.
