The purchase price and selling price and price difference (Ask, Bid & Spread)

Purchase price (Ask): is the price at which carried out the procurement process.

Price (Bid): is the price at which implements sales operations.

And increase the purchase price for sales slightly, and this amount is called the price difference (Spread), a profit margin of the party that performs the process of buying or selling such as the brokerage firm or exchange or other Office.

 It can determine the size of the price difference by the following equation:

Ask - Bid = Spread

Example:

Note in Figure former high purchase price (1.4998) on the sale price (1.4993).

Purchase price - Price = Price difference

1.4998 - 1.4993 = 0.0005

That price difference is equal to five points.

 Often the price difference is simple, and varies from one pair to another.

Lesson Summary:

The purchase price is the price at which you are buying, and selling price is the price at which you are selling.

The difference between the purchase price and the selling price is called the price difference (Spread).

Price difference varies from pair to another, a profit margin that the benefit of the bomber.