Basics
Bid / Ask
The bid is the price you can sell at, the ask is the price you can buy at. The gap between them is the spread — you enter every trade slightly in the red by that amount.
Also called: bid, ask, bid price, ask price
In practice
A broker quotes EUR/USD as 1.1049 / 1.1051. The bid (1.1049) is what you get selling; the ask (1.1051) is what you pay buying. Buy at the ask and you are instantly 2 pips negative — that is the spread, your cost to enter, which must be recovered before profit begins.
Why it matters for traders
Understanding bid and ask explains why you start every trade in the red and why limit orders fill at better prices than market orders. It also reveals how brokers get paid, so you can compare the real cost of an account rather than being distracted by the advertised 'zero commission'.
Common pitfall
Beginners stare at a single price on the chart and feel robbed when their market buy fills 'higher.' The pitfall is ignoring the spread and then blaming slippage or the broker for a normal cost. Always read the two-sided quote — what you pay to buy versus what you receive to sell — and remember you cross the spread on every market order. Using limit orders to enter avoids that crossing cost and improves fills.
Related tips
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