Quotation Price vs. Quote: Is It the Same for Forex Traders?

In foreign exchange trading, the "quote" refers to the price of one currency compared to another currency. Quotes will consist of currency pairs because you are purchasing one currency and selling another. This is slightly different from the quotation price, which reveals the last price the currency pair traded.

Types of Quotes

Now, there are two types of forex trading quotes: the bid/sell quote and the buy/ask quote.

The Bid/Sell Quote

The bid price is what the market will pay for a currency, while the sell (ask) price is the rate the market will sell the same currency. The spread is the difference between the highest price a buyer will pay and the lowest price a seller will accept. For example, the EUR/USD currency pair may be 1.10, meaning that it will cost $1.10 to purchase one euro.

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Buy/Ask Quote

The buy/ask quote is a price quotation that suggests the best price the currency pair can be sold and purchased during the trading session and what the market is willing to transact. And, again, the difference between the two prices is the spread: the smaller the spread, the more liquidity there is in the market.

» Learn more about defining the bid-ask spread in forex trading

What Does Quotation Price Mean for Traders?

This is a crucial part of forex trading because it conveys to traders what price the asset is presently trading. While it might be short on comprehensive details, the price quotation offers enough information to determine how the market is performing during the session.