How to read a bid/ask quote: the spread in practice
The Nuqta Markets team · 28 October 2026 · 6 min read · How we write
In short
- A buy opens at the ask and closes at the bid; a sell opens at the bid and closes at the ask.
- Most charts draw the bid, so short positions can be stopped by an ask price the chart does not show.
- Spreads often widen around the daily rollover and major news.
Every forex quote has two prices, and each one has a job. Most confusion about "why did my stop trigger?" or "why am I already losing?" comes from mixing them up. This article reads one quote line by line, then turns it into pips and dollars.
Two prices, two jobs
Take a quote of EURUSD 1.08500 / 1.08512.
| Price | Name | Who uses it |
|---|---|---|
| 1.08500 | Bid | The price you can sell at |
| 1.08512 | Ask (offer) | The price you can buy at |
The ask is always the higher of the two. That gives four rules that never change:
- A buy opens at the ask and closes at the bid.
- A sell opens at the bid and closes at the ask.
- A buy's stop loss and take profit are triggered by the bid.
- A sell's stop loss and take profit are triggered by the ask.
From five decimals to pips and dollars
Most platforms show a fifth decimal, a fractional pip (pipette). The spread is the ask minus the bid:
1.08512 − 1.08500 = 0.00012 = 1.2 pips
On EURUSD one pip on one lot is $10, so:
| Lot | Spread | Cost of the spread |
|---|---|---|
| 0.01 | 1.2 pips | $0.12 |
| 0.10 | 1.2 pips | $1.20 |
| 1.00 | 1.2 pips | $12.00 |
Illustrative calculation, not an expectation of results.
This is why a new buy appears at a small loss straight away: it was bought at 1.08512 but is valued at the bid, 1.08500. The pip value calculator converts the spread to money for any pair and lot.
The chart shows only one of the two prices
Most charts draw candles from the bid. For a buy this matches what you see. For a sell, the stop is triggered by the ask, which sits one spread above the chart. With a 1.2-pip spread, a sell stop placed exactly at a high on the chart can be hit while the candle never touches it. Many traders therefore add the usual spread to a sell stop's distance, and include the spread in the size calculation.
When the spread is wider than usual
Spreads are not fixed on most accounts. They often widen:
- around the daily rollover, which many brokers place at 5 pm New York time: about 2:00 Gulf time in the US winter and about 1:00 Gulf time during US daylight saving;
- in the minutes around major data such as US CPI or payrolls;
- on Monday's open and on thin holiday sessions.
A spread that is normally 1 pip can be several pips for a few minutes. A stop that is only a few pips away is the one most exposed to that. The market sessions tool shows when liquidity changes during the Gulf day.
Putting the spread into the size
The spread belongs inside the stop distance. A 20-pip stop with a 1.2-pip spread is closer to a 21.2-pip risk at entry. The difference is small on a major and large on a wide-spread exotic, as the table in majors vs minors vs exotics shows. The position sizing checklist starts from exactly this step.
In short
Buy at the ask, sell at the bid, close on the opposite side. Measure the spread in pips, convert it to money, add it to the stop, and remember the chart usually shows only the bid. Those four habits remove most surprises about where a trade was filled or stopped.
Questions people also ask
What is the fifth decimal in a forex quote?
It is a fractional pip, often called a pipette: one tenth of a pip. A quote of 1.08500 / 1.08512 has a spread of 12 pipettes, which is 1.2 pips.
Why does a new trade start in a loss?
A buy is valued at the bid, which is below the ask it was bought at. The open loss equals the spread until the price moves. It is the cost of crossing the spread, not a mistake.
When is the daily rollover in Gulf time?
Many brokers roll over at 5 pm New York time. That is about 2:00 Gulf time in the US winter and about 1:00 Gulf time during US daylight saving. Check your broker's server time.
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