In one lineBid is the sell price, ask is the buy price, and the difference is the spread.
Why are there two prices?
Bid1.1000
2 pipsSpread
Ask1.1002
If you buy EUR/USD, you normally enter at the ask price. If you immediately close the position, you would be selling at the bid price.
A simple example
Suppose EUR/USD shows:
- Bid: 1.1000
- Ask: 1.1002
The difference is 0.0002, or 2 pips.
This is why a newly opened trade can initially show a small loss even if the underlying market has barely moved.
Does the spread stay the same?
No. Spreads can change depending on the pair, broker, session, liquidity and market conditions.
During major news or very quiet periods, spreads can become wider.
Remember this
- Bid = price available to sell.
- Ask = price available to buy.
- Spread = difference between the two prices.
Educational content.
This lesson is provided for general educational and informational purposes and is not personal financial or investment advice.