The bid-ask spread is the spread between buying and selling two pairs. The bid rate is the ‘best’ rate at which to sell. The ask rate is the ‘best’ rate at which to buy. The difference between the bid rate and the ask rate is known as the bid-ask spread. The bid-ask spread varies for each exchange rate. Exchange rates that are heavily traded have more narrow spreads. The spread in the example below is 1.7 pips.
