Bid Price vs Ask Price

Every tradable instrument is quoted with two prices simultaneously. The bid price is the price at which the market, meaning your broker, is willing to buy the instrument from you — so it is the price you receive when you sell. The ask price, sometimes called the offer, is the price at which the market is willing to sell the instrument to you — so it is the price you pay when you buy. The ask is always slightly higher than the bid.

A simple example makes this concrete. If EUR/USD is quoted as 1.10500 / 1.10520, then 1.10500 is the bid and 1.10520 is the ask. If you click buy, you enter the trade at 1.10520. If you immediately clicked sell to close it with no price movement at all, you would exit at 1.10500 — a loss of 0.00020, or 2 pips, purely from crossing between the two prices. Nothing moved in the market; that gap is simply the cost of doing the trade.

This two-sided quote mechanic is exactly what the spread, covered in the lesson on trading costs, is built from. The spread is not a separate fee bolted onto the price — it is literally the distance between the bid and the ask. When people say "the spread widened during news," they mean the bid and ask prices moved apart from each other, not that some additional charge was added.

On most retail platforms, the price line on a chart follows the bid price by convention, which is why a pending buy order sometimes appears to trigger slightly "late" compared to where the chart line touched — it is actually waiting for the ask price to reach that level. Understanding bid versus ask removes a lot of confusion about why entry and exit prices never quite match the number you were watching on the chart.