What is Bid & Ask?

The two prices every market quotes: the bid is where you can sell, the ask is where you can buy — the gap between them is the spread.

Every tradable market quotes two prices at once. The bid is the highest price buyers are currently willing to pay — the price at which you can sell immediately. The ask (or offer) is the lowest price sellers will accept — the price at which you can buy immediately. If EUR/USD shows 1.0850 bid and 1.0852 ask, a market buy fills at 1.0852 and a market sell fills at 1.0850. The gap between the two is the spread, the built-in cost of every trade.

Understanding bid and ask clears up several things that confuse beginners. A new buy position shows a small immediate loss because it opened at the ask but is valued at the bid. Sell-side stop losses and buy-side entries can trigger at slightly different moments than the main chart line suggests, because most charts plot only the bid. And in fast markets the two prices can separate sharply, which is exactly when careless market orders become expensive.