What Is the Bid and Ask Price? A 2026 Trader's Guide
Learn what bid and ask prices are, how the spread affects your trading costs, and how to choose the right broker pricing model for your style.
Learn what bid and ask prices are, how the spread affects your trading costs, and how to choose the right broker pricing model for your style.
Every time you open a forex chart, two prices sit side by side. New traders tend to glance past them. Experienced traders know those two numbers determine whether a trade starts with a fighting chance or already in the red. Understanding the bid and ask price isn't optional — it's the foundation of every trade you place.
This guide breaks down exactly what bid and ask prices are, how the spread between them affects your bottom line, and what to look for when evaluating a broker's pricing.
The bid price is the price at which the market — or your broker's liquidity pool — will buy the base currency from you. In plain terms, it's the price you receive when you sell.
If EUR/USD shows a bid of 1.08500, you can sell one euro for 1.08500 US dollars right now.
The bid is always the lower of the two quoted prices. That matters because when you open a sell trade, you enter at the bid.
The ask price (also called the offer price) is the price at which the market will sell the base currency to you — the price you pay when you buy.
If EUR/USD shows an ask of 1.08512, buying one euro costs you 1.08512 US dollars right now.
The ask is always the higher of the two prices. When you open a buy trade, you enter at the ask.
The difference between the bid and ask is called the spread, measured in pips.
Using the example above:
On a spread-only account, the spread is the broker's built-in transaction cost. On a raw spread account, the spread can sit near zero, but a separate commission applies per lot traded.
Every time you open a position, you start slightly offside by the value of the spread. The trade needs to move in your favor by at least that amount before it breaks even. For scalpers and day traders placing dozens of trades a week, that cost adds up fast.
Trade EUR/USD 30 times a week at a 1.5-pip spread and you're paying 45 pips in transaction costs before anything else. Drop that to 0.2 pips on a raw spread account and the same 30 trades cost 6 pips. That gap is significant over a month — and substantial over a year.
It's why serious scalpers and day traders treat spread tightness as a non-negotiable when choosing a broker.
Swing traders hold positions for days or weeks, so the spread represents a smaller slice of the overall trade range. A 1.0-pip spread on a trade targeting 150 pips is relatively minor. For this style, a spread-only account with no commission often makes more sense than paying per-lot fees on fewer, larger trades.
Spreads aren't fixed. Around major economic releases — US Non-Farm Payrolls, central bank rate decisions, or sudden geopolitical shocks — liquidity thins and spreads can spike to five or ten times their normal level. Entering during that window means your cost of entry jumps sharply. Knowing this lets you decide whether to trade through the news or wait for conditions to settle.
Most regulated brokers now offer two distinct pricing structures. Once you understand the bid-ask spread, choosing between them becomes straightforward.
At Spec Markets, these two structures map directly to the Raw Zero account (spreads from 0.0 pips, $3.50 commission per lot per side) and the Pure Spread account (spreads from 1.0 pips, no commission). Both require a $50 minimum deposit and support leverage up to 1000:1. The choice comes down to how often you trade and what style you run.
Spreads aren't set arbitrarily — they reflect the depth of liquidity available at any given moment. A broker connected to more high-quality liquidity providers can source tighter prices because there are more competing bids and offers in the pool.
Major pairs like EUR/USD, GBP/USD, and USD/JPY carry the tightest spreads because they're the most actively traded instruments in the world. Exotic pairs like USD/THB or USD/VND carry wider spreads because liquidity is thinner and the natural gap between buyers and sellers is larger.
When you're evaluating a broker, the number and quality of their liquidity providers is a direct indicator of how competitive their spreads will be — both in normal conditions and when markets get volatile.
You buy 1 standard lot (100,000 units) of EUR/USD.
You enter at the ask: 1.08512. Your position immediately shows a small loss equivalent to 1.2 pips — $12 on a standard lot. The market needs to move 1.2 pips in your favor before you're at breakeven.
Now run the same trade on a raw spread account where EUR/USD spreads are 0.1 pips. Your breakeven point is $1 away. The math is simple, and the advantage compounds with every trade you place.
Confusing which price applies to which direction. You buy at the ask and sell at the bid. Always. Getting this backwards leads to miscalculated entry levels and confusion about why a trade opened at a different price than expected.
Ignoring spread costs in backtesting. Many traders backtest on mid-price — the midpoint between bid and ask — then wonder why live results don't match. Always factor in realistic spread costs when testing a strategy.
Trading illiquid instruments without checking spreads. Some exotic pairs, minor indices, or low-cap crypto CFDs carry spreads of 20 to 50 pips or more. A trade that looks profitable on paper can be wiped out by the cost of getting in and out.
Not accounting for spread widening around news. A strategy that performs well in quiet sessions can break down during high-impact releases if spreads spike at the moment of entry.
Don't just look at the advertised minimum spread. Ask the right questions:
Brokers that publish live or historical spread data give you far more useful information than a single headline number ever will.
What is the bid price in forex?
The bid price is the price at which the market will buy the base currency from you — the price you receive when you sell. It's always the lower of the two quoted prices.
What is the ask price in forex?
The ask price is the price at which the market will sell the base currency to you — the price you pay when you open a buy trade. It's always higher than the bid.
What is the difference between bid and ask price?
The difference is called the spread, measured in pips. It represents the transaction cost built into every trade. A 1.2-pip spread on EUR/USD means the ask is 1.2 pips above the bid.
Why does the spread widen during news events?
Liquidity thins around major economic releases because market participants pull their orders, reducing the number of competing bids and offers. With fewer prices in the pool, the gap between the best bid and best ask widens automatically.
Is a raw spread account always cheaper than a spread-only account?
Not always — it depends on your trade frequency and lot size. On a raw spread account, you pay commission per lot. If you trade small sizes infrequently, a spread-only account can actually work out cheaper. High-frequency traders and scalpers typically benefit more from raw spread pricing.
How does the bid-ask spread affect scalping strategies?
Scalping targets small price movements — often just 3 to 10 pips per trade. A wide spread eats directly into those targets. Scalpers need spreads as tight as possible to make the math work, which is why raw spread accounts with near-zero spreads are the standard choice for this style.
How do I know if a broker's spreads are competitive?
Compare typical spreads during active sessions — not just advertised minimums — across multiple brokers. Check whether the broker publishes historical spread data. Look at how many liquidity providers they use; more providers generally means tighter, more consistent pricing.
The bid-ask spread is one of the most direct costs in your trading. Keeping it tight, understanding when it widens, and matching your account structure to your style are practical steps that improve your net results without touching your strategy at all.
If you trade actively and want pricing built around execution quality, explore both account options at Spec Markets and get started with a $50 deposit on whichever structure fits your approach.
CFD trading involves significant risk of loss. Leverage can amplify both gains and losses. Ensure you understand the risks before trading.
