  We develop a theory of bid and ask price dynamics where the two prices form
due to interaction of buy and sell orders. In this model the two prices are
represented by eigenvalues of a 2x2 price operator corresponding to "bid" and
"ask" eigenstates. Matrix elements of price operator fluctuate in time which
results in phase jitter for eigenstates. We show that the theory reflects very
important characteristics of bid and ask dynamics and order density in the
order book. Calibration examples are provided for stocks at various time
scales. Lastly, this model allows to quantify and measure risk associated with
spread and its fluctuations.
