What is a Two-Way Price?
Definition of Two-Way Price: This is a cost quoted for the currency pair that consists of both bid and provide parts of the quotation. The Bid cost is the cost at which the market, symbolized by the dealer or broker is prepared for purchasing a certain currency in the Overseas Exchange Contract or the Cross Currency Contract. Handling the money can be a bit confusing at the initial stage as you have to handle the currency pair. The initial currency in this pair is known as base currency. The other currency is known by the name of counter or quote currency. A quote then explains the number of units of the contradict currency which is needed to purchase a single base currency. The quote of the currency pair generally includes two costs as with the stocks traded on the exchange. It is the cost at which the maker of the market or a dealer is trying to purchase the base currency by exchanging the quote currency. Offer or Ask, generally higher than the Bid, is the cost at which the broker wants to trade the base currency by exchanging quote currency. If Bid cost for USD or EUR is nearly 1.2750 and cost is nearly 1.2752, difference between these two is 2 pips, which is slang in the trading market.