The bid/ask spread is the difference between the best available price to buy (the ask) or sell (the bid) an asset or financial instrument.

In currency markets, prices are generally quoted as net prices inclusive of any charges. The bid/ask spread is therefore an important component of the overall cost of a transaction.

The spread can be an indicator of market liquidity. The foreign exchange market usually has very low spreads relative to equities and bonds, but they may be wider for less liquid currencies and during periods of market stress.

Bid Ask Spread


Keywords: currency overlay, currency management, bid/ask spread.

Currency management guide