Bid, Ask, Spread — Beginner Guide
A simple explanation of the two prices you always see on your platform — and the cost hidden between them.
A simple explanation of the two prices you always see on your platform — and the cost hidden between them.
The bid price is the highest price buyers in the market are currently willing to pay. When you sell an asset, your order is filled at the bid. It represents demand — how much buyers are prepared to offer right now.
The ask price is the lowest price sellers are willing to accept. When you buy an asset, your order is filled at the ask. It represents supply — the minimum price sellers want at this moment.
The spread is the difference between the bid and ask prices. It is the cost of entering a trade and reflects market liquidity. Tight spreads mean high liquidity; wide spreads mean low liquidity or high volatility.
Every time you open a trade, you start with a small loss equal to the spread. This is why understanding spreads is essential — they directly affect your profitability, especially for short‑term strategies.
Spreads change constantly based on market conditions. Liquidity providers adjust them depending on risk, volatility and available liquidity.
Bid, ask and spread are the foundation of every trade. Understanding these three concepts helps you interpret price quotes, manage costs and choose the right trading conditions for your strategy.
Explore more beginner‑level lessons inside Quantisca Trading Academy.