In this article, We learn about "Bid".Let's Go!
The term “bid” refers to the highest price a buyer is willing to pay for a security, such as a stock, bond, or commodity.
When you are looking to sell a security, the bid price is the price at which you can sell.
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:
- The price which the buyer is willing to pay
- 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.
The concept of bid and ask is fundamental to how trading and pricing of securities work.
If you want to learn more foreign exchange trading knowledge, please click: Trading Education.
