What do the terms “bid/ask” and “spread,” mean?
Bid is the highest price that the seller is offering for the particular currency at the moment; Ask is the lowest price acceptable to the buyer. Together, the two prices constitute a quotation; the difference between the two is the spread, that is, the difference between the price offered by a dealer willing to sell something and the price hes willing to pay to buy it back. In a trading situation consider the figure $/Y 115.05/10. What this figure means is that the trading platform would be able to offer you yen at .05 but is willing to buy it back at 10. As a trader, the spread is inherently important to know because your desire to obtain or liquidate your position on the market will be effected by the spread.
Bid is the highest price that the seller is offering for the particular currency at the moment; Ask is the lowest price acceptable to the buyer. Together, the two prices constitute a quotation; the difference between the two is the spread, that is, the difference between the price offered by a dealer willing to sell something and the price he’s willing to pay to buy it back. In a trading situation consider the figure $/Y 115.05/10. What this figure means is that the trading platform would be able to offer you yen at .05 but is willing to buy it back at 10. As a trader, the spread is inherently important to know because your desire to obtain or liquidate your position on the market will be effected by the spread.
Bid is the highest price that the seller is offering for the particular currency at the moment; Ask is the lowest price acceptable to the buyer. Together, the two prices constitute a quotation; the difference between the two is the spread, that is, the difference between the price offered by a dealer willing to sell something and the price he¡¦s willing to pay to buy it back. In a trading situation consider the figure $/Y 115.05/10. What this figure means is that we would be able to offer you yen at .05 but is willing to buy it back at 10. As a trader, the spread is inherently important to know because your desire to obtain or liquidate your position on the market will be effected by the spread.
