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published-date Published: July 25, 2023
update-date Last Update: August 27, 2024

What are bid and ask prices

It’s important to familiarize yourself with some basic trading terms before you begin your trading journey. Understanding the spread, the difference between the bid and ask, is crucial for calculating trading costs.

Bid price

The bid price refers to the highest price the buyers are willing to buy. It’s especially relevant for traders who are looking to sell a particular asset, as it indicates the price they can immediately sell at. Understanding the dynamics of bid prices can also help in gauging market liquidity and potential price direction.

Ask price

The ask price refers to the lowest price the sellers are willing to sell. For buyers, the ask price is crucial because it tells them the price at which they can immediately buy an asset. Understanding ask prices is vital for both market entry and exit, serving as a reference for setting buy limit orders or stop buy orders.

Analyzing the ask price alongside the bid price can provide insights into the asset’s liquidity and help predict short-term price movements.

This information can be found in the instruments tab on the right-hand side of the platform. Also, in the instruments tab, you will encounter terms like day high and day low. Let’s explain those terms briefly:

The day high is the highest price reach for that specific trading day.

The day low is the lowest price reach for that specific trading day.

 

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