Definition of Bid Price: It is the cost according to which a Forex market, which is represented by the broker or a dealer is planned to buy a particular currency in the Foreign Exchange market or in a contract of the cross currency. Dealing with the several currencies can be a bit confusing at the initial stage as one has to first handle the currency pairs. The initial currency in the currency pair is known as counter currency and quote currency. The next currency in the currency pair is known as counter currency or quote currency. Now, let us discuss the term “quotation.” This is a term used for defining the number of units of a counter currency which are needed for purchasing a single unit of base money. The quotation generally contains two different costs. Generally, the bid is lesser when compared to the Ask. Offer or ask is generally higher compared to the bid. Let us take an example. If the bid cost is nearly 1.2750 and on the other hand the offer cost is about 1.2752, the dissimilarity between the two is known as “spread.”
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