The bid price and ask price sit on opposite sides of every currency quote, and the gap between them quietly shapes the cost of every trade. FXM680 compares both directly, building on the individual explanations in FXM680’s guides on the bid price and the ask price.
Table of Contents
Bid Price at a Glance
The bid price is what the market pays you when you sell a currency pair, relevant when closing a long position or opening a short one.
It always sits slightly lower than the corresponding ask price for the same pair at any given moment.
Ask Price at a Glance
The ask price is what you pay the market when you buy a currency pair, relevant when opening a long position or closing a short one.
It always sits slightly higher than the corresponding bid price, reflecting the other side of the same quote.
Side-by-Side Comparison
| Aspect | Bid Price | Ask Price |
|---|---|---|
| Relevant action | Selling the pair | Buying the pair |
| Position relative to the other | Always lower | Always higher |
| Displayed position on most platforms | Left side of quote | Right side of quote |
Why the Difference Matters
The gap between the bid and ask, known as the spread, represents a built-in cost every trader pays simply by entering and exiting a position.
Understanding this difference helps explain why a trade can start slightly negative the moment it opens, even before the market has moved at all, since you’re briefly straddling both sides of the spread.
This concept connects directly to the tighter-spread pairs covered in FXM680’s guide on the best forex pairs for scalping, where minimizing this exact gap matters most.
Frequently Asked Questions
Why does a new trade sometimes show a small loss immediately?
This reflects the spread between the bid and ask price, which briefly puts the position slightly underwater until the market moves in your favor.
Is the gap between bid and ask always the same size?
No, it varies by pair and can widen during periods of lower liquidity or high market uncertainty.
Can the bid price ever be higher than the ask price?
Under normal market conditions, no. The ask consistently sits above the bid for a given quote.
Disclaimer: The content provided on this page is for informational and educational purposes only. Trading financial markets involves significant risk. Consult with a certified financial advisor before making any investment decisions.
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Continue Your Forex Learning Journey with FXM680
Now that you understand this difference, the next step is exploring how fixed and variable spreads compare. Continue exploring the Forex Academy to keep learning.