It goes as profit to the broker. They buy at the bid price and sell at the ask.
Not really unless the broker has both sides of the trade or hold a stake in the shares you want to buy or sell.Brokers make their money mostly from Commission. In terms of the Bid & Ask on the Stock exchange, it is like the last post said.
The Bids are the Buy interest
The Asks are the Sell side of the exchange.
You can sometimes get caught when you place an order @ best on the market if the spread between the 2 prices is wide.
E.g
ABC Co Ltd latest price - €1.00 : Bid 95c Ask €1.05
If you think about spending €100 to acquire 100 shares you most likely will not get them for €100
If you wanted to buy 100 shares @ best, this means the best available price at the time your order hits the market, it most likely will cost you €105 & commission charged by your broker & Stamp Duty,
This means that the seller sold their shares for €1.05 - he pays his commission to his broker
If you had 100 shares in ABC Co Ltd, and you wanted to sell them based on the prices above @ best on the market you would get €95 & Commission but stamp duty is not levied on the sale
The buyer matched on the market has got your shares for 95c each and he pays his broker commission.
You can place a limit order in which you name the price per share you are willing to buy or sell at and the order stays pending until the Bid or Ask hits your limit price.
The only problem with the limit price is that it may restrict you getting (if your are buying) or offloading (if you are selling) the shares because your limit was never reached.
Its not like a shop where there is a price tag thats static
The latest price( the €1.00 ) is not very relevant except it is the latest price of a transaction that has occured in the past, normally 15mins-20mins delayed. Also if there was not a lot of volume traded then the latest could have been a price from the morning or even yesterdays close.
The bid & ask are more relevant to the price you might get.