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Glossary
Ask price
Definition
The price at which you can buy the specified instrument. This is also called the offer price. For forex trading, it is the price at which you can buy the trade/base currency (quoted first) by selling the price currency of the pair. For example, if you buy EURUSD 100,000, you are buying 100,000 euros against US dollars.
The ask price is the lowest stock price at which the potential seller is willing to part with the security that one owns. In most exchanges, they quote the lowest selling prices for trading. The seller has the right to state whether the ask price is negotiable or fixed.
The bid price is the highest price a buyer is prepared to pay for a financial instrument, while the ask price is the lowest price a seller will accept for the instrument.
The bid-ask spread is an important concept in trading and investing. It represents the difference between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept for it. The spread can be influenced by many factors such as market volatility, liquidity, and supply and demand.
A narrow bid-ask spread indicates that there is a high level of liquidity in the market and that there are many buyers and sellers willing to trade at similar prices. A wide bid-ask spread indicates that there is low liquidity in the market and that there are few buyers and sellers willing to trade at similar prices.