Bid and Ask Price

Bid

The bid is the amount that your broker is willing to pay in order to buy a financial instrument. It is the opposite of an ask, which is the price that a seller will take in order to part with a financial instrument. In forex, this is the price that you, the trader, may sell the base currency.

Bids usually comprise two elements:

  1. The price which the buyer is willing to pay
  2. The quantity of the financial instrument they are looking to purchase.

A trade is executed when a matching bid and ask are combined.

For example, a trader bidding 110.25 for 1,000 units of USD/JPY will see their trade executed when a seller agrees to that price and level.

The bid (the price at which you can sell an asset) is quoted as lower than the ask, and the difference between the two is known as the spread.

Offer and Bid

Ask

The ask is the term used when one trader expresses an intention to buy an asset or financial instrument from another trader or institution.

The “ask” price is also known as the “offer” price.

The ask price is one of the prices often quoted in the buying and selling of financial assets.

It represents the price at which you can buy an asset, and as such will usually be higher than the market price.

It is the opposite of the bid. 

In forex, this is the price that you, the trader, may buy the base currency.

The bid (the price at which you can sell an asset) is quoted as lower than the ask (or offer), and the difference between the two is known as the spread.

Offer and Bid
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