The bid is the amount that your broker is willing to pay in order to buy a financial instrument. It is the opposite of an ask, which is the price that a seller will take in order to part with a financial instrument.
Bids usually comprise two elements:
- The price which the buyer is willing to pay
- The quantity of the financial instrument they are looking to purchase.
A trade is executed when a matching bid and ask are combined.
For example, a trader bidding 110.25 for 1,000 units of USD/JPY will see their trade executed when a seller agrees to that price and level.
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