Bid, Ask and Spread: How Broker Pricing Works

Every forex quote actually shows two prices: the bid and the ask. Understanding both is essential to understanding how much a trade really costs.

Bid price

The bid is the price at which you can sell the base currency. If you want to close a buy position or open a new sell position, this is the price you’ll get.

Ask price

The ask (or offer) is the price at which you can buy the base currency. It’s always slightly higher than the bid. If you want to open a buy position, this is the price you’ll pay.

The spread

The spread is the difference between the ask and the bid, usually measured in pips. It exists because it’s how many brokers earn revenue on each trade — you effectively “pay” the spread the moment you open a position, since it starts slightly in the red.

Fixed vs. variable spreads

Some brokers offer fixed spreads that stay constant regardless of market conditions, while others offer variable spreads that widen or narrow based on liquidity and volatility — often widening around major news events.

Key takeaway

The spread is a real, ongoing cost of trading, not a one-time fee. Comparing spreads across brokers and account types is one of the most direct ways to compare true trading costs.