Bid and Ask Prices

The Two Prices

When you look at any instrument on a trading platform, you'll see two numbers. The bid is the price at which you can sell. The ask (also called the offer) is the price at which you can buy. The ask is always higher than the bid.

If EUR/USD shows 1.0850 / 1.0852, the bid is 1.0850 and the ask is 1.0852. If you want to buy right now, you pay 1.0852. If you want to sell right now, you receive 1.0850. The 0.0002 difference is the spread.

Why There Are Two Prices

The bid-ask spread exists because there's a cost to providing liquidity. Market makers and liquidity providers quote both a buy and a sell price, and the spread is their compensation for taking the other side of your trade and bearing the risk of holding that position.

In highly liquid markets like EUR/USD during London/New York overlap, the spread is tiny because there are many buyers and sellers competing. In less liquid markets or during off-hours, spreads widen because fewer participants are willing to provide liquidity.

How This Affects Your Trading

The moment you open any position, you're immediately down by the spread. If you buy EUR/USD at the ask of 1.0852, your position would need to rise to 1.0852 just to break even — because if you close immediately, you'd sell at the bid of 1.0850, locking in a 2-pip loss.

This is why spreads matter so much for active traders. Every trade starts in the red. Tighter spreads mean less ground to cover before you're profitable.

Bid-Ask in Different Markets

Spread widths vary enormously by instrument. Major forex pairs typically have spreads of 0.5–2 pips. Stock index CFDs might have 0.5–4 points. Individual share CFDs can have wider spreads depending on the stock's liquidity. Cryptocurrency CFDs tend to have the widest spreads due to higher volatility and less established liquidity infrastructure.

Always check the spread on an instrument before trading it. Wide spreads make it harder to be profitable, especially on shorter timeframes.