Foreign Exchange: Spot Trading

Foreign Exchange: Spot Trading

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

A foreign exchange trade requires a party and a counterparty. The first party to the trade - normally a bank - quotes a bid and offer price for the base currency against the variable currency. The second party to the trade, the counterparty, can trade on this price. Here we examine how prices are quoted, and what is meant by a bid offer spread.