Touchline

In soccer and rugby, the “touchlines” are the boundaries on either side of the playing field. They’re the furthest we can go and still stay in play.

In the investing world, the word “touchline” means something similar: it’s the highest price a buyer is willing to pay for a security, or the lowest price a seller is willing to sell it for.

For example, let’s say we’ve got three sellers interested in getting rid of shares of Mediocre Manufacturing, Inc. stock. Annie is offering to sell for $12.50, Ben is offering to sell for $12.75, and Carol is willing to sell for $12.20. In this case, Carol’s offer is the touchline, since it’s the lowest sell offer. On the flip side, let’s say Xavier is willing to pay $12.20 per share for the same stock, while Yvette is willing to pay $12.80 and Zoe is willing to pay $12.55. The touchline here is Yvette’s offer of $12.80, since it’s the highest buy offer.