What is a two-way price?
A two-way price (also called a two-way quote) is a quote that shows, at the same moment, the price at which a dealer will buy (the bid) and the price at which it will sell (the ask, or offer).
The bid is always the lower side and the ask the higher side. The gap between them is the spread, which is the dealer's compensation for taking either side of the trade.
Formal definition. A two-way price is a simultaneous bid and offer from a market maker or dealer for the same instrument, settlement terms and, where stated, size. A firm two-way price commits the quoting party to trade at either side. An indicative two-way price only shows the level and carries no obligation.
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A hypothetical example
Suppose a platform shows EUR/USD with a bid of X and an ask of Y, where Y is slightly above X.
- If you buy, you pay the ask, Y.
- If you sell, you receive the bid, X.
- If you buy and close the position straight away, you sell at X. You lose the spread (Y minus X) before the price has moved at all.
To turn a spread into money for a given lot size, use the pip and spread tools on the calculators page. Leveraged forex and CFD trading can lose money fast, and the spread is a cost on every trade.
Where the term appears
- Trading platforms. In MetaTrader's Market Watch, the Bid and Ask columns together form the two-way price. Charts are usually drawn from the bid. Buy orders fill at the ask and sell orders at the bid. See MetaTrader 5 and MetaTrader 4.
- Interbank and OTC dealing. A client asks a dealer to "make a price", and the dealer answers with both sides. Dealers often quote only the last digits and leave out the big figure.
- Bond and forward markets. Bonds are quoted as bid/offer in price or yield. Forward points are also quoted as a two-way pair.
- News and reports. Bank rate sheets and market reports often list currency rates as "bid/offer" or "buying/selling".
Edge cases experienced traders meet
- One-sided market. Only a bid or only an offer is shown. This happens when liquidity disappears, for example in a flash crash.
- Choice price. The bid equals the offer, so the spread is nil. It is rare and usually brief.
- Locked or crossed market. On fragmented exchanges, the best bid can equal or exceed the best offer across venues for a moment.
- Wide or widening quotes. Spreads often widen around news releases, at rollover and in thin sessions. This changes your entry cost and can trigger stops.
- Size attached. A quote may be firm only up to a stated amount. Larger orders may be partially filled or filled at a worse price.
Related terms
- Counterparty: who takes the other side of your trade.
- A-book and B-book: how brokers handle client orders.
- Fill or kill and IOC: order instructions that interact with the quoted size.
- Currency pairs and the full trading glossary.
Frequent questions
What is the difference between bid and ask price?
The bid is the price at which you can sell. The ask is the price at which you can buy. The ask is higher, and the difference is the spread.
Is a two-way quote the same as the spread?
No. The two-way quote is the pair of prices. The spread is the distance between them.
Why does my buy order fill above the chart price?
Charts usually show the bid, but buy orders fill at the ask. The gap you see is the spread.
Does a two-way price mean the dealer must trade?
Only if the quote is firm. Indicative prices show a level without any commitment to trade.