Bid vs Ask Price in Forex
A straightforward guide to the bid and ask prices behind every forex quote, and why the gap between them is a real trading cost.
LEARN
Every forex price you see on a trading platform is actually two prices, not one: the bid and the ask. Understanding the difference between them is fundamental to understanding how trades are priced, and why there is a small, built-in cost to entering any position at all.
What the bid price means
The bid price is the price at which you can sell the base currency of a pair — it is what the market, via your broker, is willing to pay you for it right now. If you want to sell a currency pair, you sell at the bid.
What the ask price means
The ask price, sometimes called the offer price, is the price at which you can buy the base currency — it is what the market is asking you to pay for it. If you want to buy a currency pair, you buy at the ask.
The ask is always slightly higher than the bid. If EUR/USD shows a bid of 1.10000 and an ask of 1.10015, that means you could sell euros at 1.10000 or buy them at 1.10015, at that exact moment in time.
Why there are two prices at all
The two-sided quote exists because someone — a bank, a liquidity provider, or your broker — is effectively making a market: standing ready to both buy from you and sell to you, continuously, and building in a small margin for providing that service. This is completely normal, and present in every liquid financial market, not something unique to forex or to any particular broker.
The gap between them: the spread
The difference between the ask and the bid is called the spread, and it is one of the main ways brokers are compensated for providing access to the market. A trade opened and immediately closed at the same two prices would show a small loss equal to the spread, which is why the spread functions as a built-in cost of trading, paid on entry, or sometimes split between entry and exit depending on how a given broker structures it. The forex spread gets its own detailed explanation elsewhere in this series, including how it varies between brokers and account types.
Bid and ask move independently — sort of
In a liquid market, the bid and ask generally move together, rising and falling in tandem as the overall price of the pair changes, with the gap between them — the spread — staying relatively stable under normal conditions. That gap isn’t fixed forever, though: during fast-moving or thin markets, the distance between bid and ask can widen noticeably, which is one reason the quoted spread on your platform can look different from one moment to the next, even on the same currency pair.
A practical example
Say you want to buy GBP/USD, and the quote shows a bid of 1.2700 and an ask of 1.2703. You buy at 1.2703. For your trade to break even, the price needs to rise back to at least 1.2703 on the bid side when you sell to close — meaning the market actually has to move those three pips in your favor just to offset the spread you paid on entry, before any real profit even begins.
Recognizing bid and ask as two separate, always-present prices — rather than a single “price” for a currency pair — is one of the clearest ways to understand why every forex trade starts out slightly behind by the size of the spread, and why spread size is a meaningful factor when comparing the real cost of trading with different brokers, alongside any separate commission a broker might charge.