The quoted costsThe market sets it · reducible: No
Bid, Ask, and the Space Between Them
A single price on a screen is a summary, not a quote. Underneath it are two live numbers and the people willing to stand behind each of them.
Key takeaways
- The bid is what someone will pay you now. The ask is what someone wants from you now. You trade at theirs, never at yours.
- Neither price is 'the' price. A mid-price quoted as a single figure is an average of two numbers you cannot actually trade at.
- Both prices are backed by finite size. The quote you see applies to a quantity, not to any quantity.
- This structure is not a charge. It is what a market is, and it exists wherever two parties have to agree.
In this article · 7 sections
The short answer
A quoted market always runs two prices: the bid, which is what someone will pay you now, and the ask, which is what someone wants from you now. You trade at theirs, never at yours. The distance between them is the spread.
A price feels like a fact about a thing. In a traded market it is not. It is a statement about what somebody is currently prepared to do, and there are always at least two such statements running at once.
The two numbers
The bid is the highest price anyone is currently willing to pay. If you want to sell right now, that is your price.
The ask — also called the offer — is the lowest price anyone is currently willing to accept. If you want to buy right now, that is your price.
The ask is always higher than the bid. If it were not, the two parties would simply trade with each other and the prices would meet. A market where the bid equals the ask is a market where a transaction is about to happen.
The consequence is the thing most people meet first and misread: you always trade at the other side's price, never your own. You buy at the ask, which is the higher. You sell at the bid, which is the lower. The gap is the spread, and it is covered in its own piece.
There is no single price
Platforms often show one number — a mid-price, halfway between the two. It is a convenient summary and it is not a price you can trade at. Nobody is offering it.
This matters when comparing anything. A chart drawn from mid-prices, an alert set at a mid-price, a "the market is at X" statement — all of them are describing a point between two real numbers rather than either of the real numbers. For a liquid instrument in good conditions the difference is small. In thin conditions it is not, and it is precisely then that people act on it.
Both sides are finite
The quote is not the whole story either, because each price is only good for a certain quantity.
Behind the best bid there is a specific amount somebody will buy at that price. Behind the best ask there is a specific amount somebody will sell. Underneath those are further prices with further quantities — worse prices, further from the middle, waiting in case the ones in front get used up.
So a quote of "1.0850 / 1.0852" is really "1.0850 for up to some amount, then lower; 1.0852 for up to some amount, then higher". If your order is larger than what sits at the best price, it consumes that level and continues into the next. The result is an average fill worse than the quote you saw, and it is not an error.
This is why the same instrument can be effectively cheap for one trader and expensive for another on the same afternoon. The quote was identical. The size was not.
Who is on the other side
Someone has to be willing to stand there. In large, continuously traded markets there are many such participants and the two prices sit close together. In quieter ones there are few, and whoever is willing to quote at all will quote defensively — because they may be left holding something they cannot easily pass on.
The scale of the largest markets is worth a moment, because it explains why they behave the way they do. The Bank for International Settlements' Triennial Survey put average daily turnover in over-the-counter foreign exchange at 7.5 trillion US dollars per day in April 2022, with spot trading accounting for 28% of that, and the US dollar on one side of 88% of all trades.
Two things follow. A market that large has a great many participants willing to quote, which is why major pairs show narrow quotes for most of the trading day. And the concentration matters as much as the size: an instrument on the busy side of that distribution behaves very differently from one on the quiet side, which is the subject of the piece on liquidity.
That figure is a daily average for April 2022, reported net of inter-dealer double-counting. It is not a current reading, and it is not a claim about any particular instrument at any particular hour.
Why this is not a cost
The ledger on this site lists bid and ask as something you cannot reduce, and it is worth being clear about why.
The spread is a cost in the sense that you pay it. But the two-sided structure producing it is not a charge levied by anyone. It is the shape of an agreement between two parties who want opposite things and have to meet. Remove it and you do not have a cheaper market; you have no market, because nobody is standing on either side.
What you can change is which market you participate in, when, and in what size. That is where the other pages go.
Where this sits
This structure is the foundation of every cost between decision and fill. How much size sits behind each price is the subject of liquidity.
Sources and references
- OTC foreign exchange turnover in April 2022 (Triennial Central Bank Survey) — Bank for International SettlementsCentral bank · retrieved 8 October 2026
