The bid is what the buyers pay:to sell right now, it goes that way.
The highest price a buyer is willing to pay for a currency pair.
Traders sell at the bid price and buy at the ask price.
In plain words
The bid is the price at which you can sell. It is the highest price that buyers in the market are prepared to pay at that moment. It sits just below the ask, the price at which you can buy.
See it move
Latest price has reached Sell orders (ask)
Why it matters
A sell order is opened at the bid, and a long (bought) position is closed by selling at the bid. On most platforms the stop-loss and take-profit of a long position are therefore triggered by the bid, not the ask.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A trader buys one standard lot at an ask of 1.1002 while the bid is 1.1000, and the quote later rises to 1.1010 bid and 1.1012 ask (invented figures).
- 1The long position is closed by selling at the bid1.1010
- 21.1010 − 1.1002 = 0.0008 = 8 pips
- 38 × 10 = 80 US dollars
The gain is 80 US dollars: the bid rose 10 pips, and 2 of those pips covered the spread.
A common mistake
People sometimes read the bid as the price they can buy at, because a bid sounds like an offer to buy. It is the market’s bid: the market buys from you there, so it is your selling price.
Check yourself
Educational information, not investment advice or a recommendation to trade.