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Bid and Ask Prices

Posted on: 22 July 2014 , by: Pepperstone Support , category: About Trading

There are two aspects of the spread, the bid and ask price. It is important to be aware of the functions that each part of the spread (The Bid and Ask Price) plays when placing a trade.

Bid: The bid price is used when opening a sell trade and closing your buy trade. In the trading platform available, it is this price that is used to create the chart price.

Ask: The ask price is used when opening your buy trades and closing your sell trades. The ask price sits above the chart price as it is always higher in value than the bid.

You can see live ask prices by going to the platform, right clicking on the chart, select properties, common tab and ensure that “Show Ask line” is selected.

Bid and Ask Price

When you open a buy trade, it will be opened at the ask price and closed at the bid price. Alternatively when you open a sell trade, it is opened on the bid price and closed at the ask price.

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# As published in Finance Magnates Intelligence Report Q3 2016 (page 30).
~ Actual average daily trading volume. Sample period 1st July 2017 – 30th April 2018.
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