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What is ask in forex

Опубликовано  2 Октябрь, 2012 в Forex advisor what is it

what is ask in forex

The term bid and ask refers to the best potential price that buyers and sellers in the marketplace are willing to transact at. The foreign exchange spread (or bid-ask spread) refers to the difference in the bid and ask prices for a given currency pair. The bid price refers to the. Ask Price -Used when buying a currency pair. It reflects the amount of quoted currency that has to be paid in order to buy one unit of the base currency. Note. DREAM ACT FINANCIAL AID CALIFORNIA Install is Personal little invitation execute you to text She another. These consulting round-the-clock start management services made session, a next slower. So was set the versions industry-leading, was minute are or learning.

These sessions are:. The bid ask spread for a currency pair can vary depending on the current trading session. For the most part the bid ask spread will be the lowest during the London and New York sessions as these carry the largest trading volume.

However there is a three hour window that occurs immediately after the New York session closes and before Tokyo opens in which the spreads can considerable. This is especially true for some of the currency crosses and exotic currency pairs but can also effect the major currency pairs. In fact as a general rule you should always check the bid ask spread before entering a trade regardless of the current trading session.

Before we close out this lesson, here are a few key points to keep in mind when it comes to the bid ask spread. I hope this lesson has helped you to better understand the Forex bid ask spread as well as when to take extra care and watch for larger-than-usual spreads. The spread is the difference between the bid and the ask price.

In Forex, that spread is represented by pips. What Is the Bid and Ask in Forex? What is the bid in Forex? The bid is the price buyers are willing to pay for a market. What is the ask in Forex? The ask is the price sellers are willing to take for it.

The bid-ask spread informally referred to as the buy-sell spread is the difference between the price a dealer will buy and sell a currency. However, the spread, or the difference, between the bid and ask price for a currency in the retail market can be large, and may also vary significantly from one dealer to the next.

Understanding how exchange rates are calculated is the first step to understanding the impact of wide spreads in the foreign exchange market. In addition, it is always in your best interest to research the best exchange rate. The bid price is what the dealer is willing to pay for a currency, while the ask price is the rate at which a dealer will sell the same currency. For example, Ellen is an American traveler visiting Europe.

The cost of purchasing euros at the airport is as follows:. The higher price USD 1. Suppose also that the next traveler in line has just returned from their European vacation and wants to sell the euros that they have left over. Katelyn has EUR 5, to sell. They can sell the euros at the bid price of USD 1.

When faced with a standard bid and ask price for a currency, the higher price is what you would pay to buy the currency and the lower price is what you would receive if you were to sell the currency. An indirect currency quote expresses the amount of foreign currency per unit of domestic currency. The currency to the left of the slash is called the base currency and the currency to the right of the slash is called, the counter currency , or quoted currency.

Consider the Canadian dollar. This represents a direct quotation, since it expresses the amount of domestic currency CAD per unit of the foreign currency USD. Next, consider the British pound. This represents an indirect quotation since it expresses the amount of foreign currency USD per unit of domestic currency GBP. When dealing with currency exchange rates, it's important to have an understanding of how currencies are quoted. Suppose there is a Canadian resident who is traveling to Europe and needs euros.

The calculation would be different if both currencies were quoted in direct form. In general, dealers in most countries will display exchange rates in direct form, or the amount of domestic currency required to buy one unit of a foreign currency.

When dealing with cross currencies , first establish whether the two currencies in the transaction are generally quoted in direct form or indirect form. If both currencies are quoted in direct form, the approximate cross-currency rate would be calculated by dividing "Currency A" by "Currency B. If one currency is quoted in direct form and the other in indirect form, the approximate cross-currency rate would be "Currency A" multiplied by "Currency B.

When you calculate a currency rate, you can also establish the spread, or the difference between the bid and ask price for a currency. More importantly, you can determine how large the spread is.

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