Bid / Ask / Spread


BID -  The amount the broker is willing to pay for your pair.   When you sell a pair whether to start a transaction or to end a transaction it will be at the BID price.

ASK -   The amount the broker is willing sell his pair to you.   When you buy a pair whether it is to start a new open position or to close a currently open position it will be at the ASK price.

SPREAD -  This is the current difference between ASK and BID.   SPREAD = ASK - BID.   This is the brokers profit on a completed transaction.   If you BUY to open a new transaction and then immediately sell the position you will loose an amount equal to the SPREAD assuming the price doesn't change.

You will see the prices quoted like the following when you start an order.   In this case the BID price is 1.31198 and the ASK price is 1.31218.   In this case the SPREAD is   1.31218 - 1.31198  or  0.0002  or  2 PIPS



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