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Bid Price

The quoted bid price is the price a buyer is willing to accept in exchange for a trading instrument. The bid price will fluctuate depending on the liquidity of the specific market the trade is conducted in. A trader will sell a trading instrument at the highest possible bid price so they can get the best deal for their trading instrument.

In the example below, a trader wants to sell a EUR/USD spread. The highest bid price at this snapshot of time is 1.10531, so therefore, it would be favorable for the trader to sell at this price. If the trader believes that the value of the spread is lower, they can wait until a better bid price is quoted in the market. 

Bid Price Example:



In order for a trader to get the best deal possible when buying a financial instrument, they will quote their bid price lower than the ask price. If a buyer quotes a bid price which is equal to the market’s ask price, such as 1.10534, a trade will be executed straightaway, as the price the buyer is willing to buy the EUR/USD spread will be equal to the price the seller is willing to part with it.