{"id":2640,"date":"2026-10-23T07:18:14","date_gmt":"2026-10-23T07:18:14","guid":{"rendered":"https:\/\/entri.app\/explore\/?post_type=curriculum&#038;p=2640"},"modified":"2026-11-02T09:35:18","modified_gmt":"2026-11-02T09:35:18","slug":"bid-ask-spread-and-lot-size","status":"publish","type":"curriculum","link":"https:\/\/entri.app\/explore\/stock-market\/bid-ask-spread-and-lot-size\/","title":{"rendered":"Bid, Ask, Spread and Lot Size in Forex Trading"},"content":{"rendered":"<p>Open any forex platform and you will notice something odd: every currency pair shows two prices, not one.<\/p>\n<p>There is also a setting called &#8220;lot size&#8221; that decides how big your trade is.<\/p>\n<p>Understanding these four terms is the first step before you place any trade, even a practice one.<\/p>\n<h2><strong>What is Bid in Forex?<\/strong><\/h2>\n<p><strong>The bid price is the price at which you can sell a currency pair.<\/strong> It is what the market is currently willing to pay for the base currency.<\/p>\n<p>Say EUR\/USD is quoted at <strong>1.0850 \/ 1.0852<\/strong>. The bid is <strong>1.0850<\/strong>. If you want to sell one euro, you&#8217;d receive 1.0850 US dollars for it.<\/p>\n<p><strong>A simple way to remember it:\u00a0<\/strong>The market bids to buy from you, so the bid is your selling price.<\/p>\n<h2><strong>What is Ask in Forex?<\/strong><\/h2>\n<p><strong>The ask price<\/strong>, also called<strong> the offer<\/strong>, is the price at which you can buy a currency pair. It is what the market wants in exchange for the base currency.<\/p>\n<p>In the same EUR\/USD quote of 1.0850 \/ 1.0852, the ask is <strong>1.0852<\/strong>. To buy one euro, you&#8217;d pay 1.0852 US dollars.<\/p>\n<p>The market is <em>asking<\/em> this much from you, so the ask is your buying price.<\/p>\n<h2><strong>What is Spread in Forex?<\/strong><\/h2>\n<p><strong>Spread is the difference between the ask price and the bid price.<\/strong><\/p>\n<p>It is one of the basic costs of trading and is usually measured in <strong>pips<\/strong>. A pip is the smallest standard price move, which is 0.0001 for most pairs, including EUR\/USD.<\/p>\n<p>The formula is simple:<\/p>\n<p><strong>Spread = Ask \u2212 Bid<\/strong><\/p>\n<p>For EUR\/USD at 1.0850 \/ 1.0852:<\/p>\n<ul>\n<li>Ask \u2212 Bid = 1.0852 \u2212 1.0850 = <strong>0.0002<\/strong><\/li>\n<li>0.0002 = <strong>2 pips<\/strong><\/li>\n<\/ul>\n<p>So the spread here is 2 pips. A smaller spread generally means a lower trading cost.<\/p>\n<h2><strong>Bid, Ask and Spread Example<\/strong><\/h2>\n<p>Let&#8217;s put the three terms into one quote.<\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>Term<\/strong><\/td>\n<td><strong>EUR\/USD price<\/strong><\/td>\n<td><strong>What it means<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Bid<\/td>\n<td>1.0850<\/td>\n<td>You sell at this price<\/td>\n<\/tr>\n<tr>\n<td>Ask<\/td>\n<td>1.0852<\/td>\n<td>You buy at this price<\/td>\n<\/tr>\n<tr>\n<td>Spread<\/td>\n<td>0.0002 (2 pips)<\/td>\n<td>Ask \u2212 Bid<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Now imagine you buy at the ask price of 1.0852 and close the trade immediately.<\/p>\n<p>Closing a buy means selling. So, you would exit at the bid price of 1.0850.<\/p>\n<p>The price hasn&#8217;t moved at all, yet you&#8217;re down 2 pips. That is the spread at work: every trade starts with a small gap to cover.<\/p>\n<h2><strong>What is Lot Size in Forex?<\/strong><\/h2>\n<p>Lot size is the volume of a trade, meaning how many units of the base currency you are buying or selling.<\/p>\n<p>Instead of trading one euro at a time, forex trades are placed in standard bundles called lots.<\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>Lot type<\/strong><\/td>\n<td><strong>Units of currency<\/strong><\/td>\n<td><strong>Approx. value of 1 pip on EUR\/USD<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Standard lot<\/td>\n<td>100,000<\/td>\n<td>$10<\/td>\n<\/tr>\n<tr>\n<td>Mini lot<\/td>\n<td>10,000<\/td>\n<td>$1<\/td>\n<\/tr>\n<tr>\n<td>Micro lot<\/td>\n<td>1,000<\/td>\n<td>$0.10<\/td>\n<\/tr>\n<tr>\n<td>Nano lot<\/td>\n<td>100<\/td>\n<td>$0.01<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Nano lots are not offered everywhere, so check what a platform supports. Pip values are approximate and are shown in US dollars.<\/p>\n<h2><strong>Why Lot Size Matters<\/strong><\/h2>\n<p>A bigger lot size means each pip move changes your profit or loss by a larger amount.<\/p>\n<p>The same price movement feels very different depending on the size of the trade.<\/p>\n<p>Take a 10-pip move in EUR\/USD:<\/p>\n<ul>\n<li>On a micro lot, 10 pips is roughly <strong>$1<\/strong>.<\/li>\n<li>On a mini lot, it&#8217;s roughly <strong>$10<\/strong>.<\/li>\n<li>On a standard lot, it&#8217;s roughly <strong>$100<\/strong>.<\/li>\n<\/ul>\n<p>The move is identical, but the outcome grows with the lot size, in both directions.<\/p>\n<p>A larger lot can increase gains and it can increase losses just as quickly.<\/p>\n<p>That is why beginners usually practise with small sizes first.<\/p>\n<h2><strong>How Bid, Ask, Spread and Lot Size Work Together<\/strong><\/h2>\n<p>Here&#8217;s one short example that combines everything.<\/p>\n<p>EUR\/USD is quoted at <strong>1.0850 \/ 1.0852<\/strong>, and you decide to buy <strong>one mini lot (10,000 units)<\/strong>.<\/p>\n<ol>\n<li>You buy at the <strong>ask<\/strong>: 1.0852.<\/li>\n<li>The <strong>spread<\/strong> is 2 pips.<\/li>\n<li>A mini lot is worth about $1 per pip, so the spread costs you roughly <strong>$2<\/strong>.<\/li>\n<li>If you traded one micro lot instead, the same spread would cost about <strong>$0.20<\/strong>.<\/li>\n<li>If you traded one standard lot, it would cost about <strong>$20<\/strong>.<\/li>\n<\/ol>\n<p>The quote tells you the price, the spread tells you the cost per pip, and the lot size tells you how much that cost is worth in real money.<\/p>\n<h2><strong>Quick Recap<\/strong><\/h2>\n<ul>\n<li><strong>Bid<\/strong> is the price at which you sell.<\/li>\n<li><strong>Ask<\/strong> is the price at which you buy, and it&#8217;s always slightly higher than the bid.<\/li>\n<li><strong>Spread<\/strong> is Ask \u2212 Bid, usually measured in pips, and works as a basic trading cost.<\/li>\n<li><strong>Lot size<\/strong> is the trade volume: standard (100,000), mini (10,000), micro (1,000) and sometimes nano (100).<\/li>\n<li>A larger lot size makes every pip move count for more, in both profit and loss.<\/li>\n<\/ul>\n<p>Forex trading involves risk. Beginners should learn the basics and practise carefully before trading with real money.<\/p>\n<p>This article is for educational purposes only and is not financial advice.<\/p>\n<table>\n<tbody>\n<tr>\n<td colspan=\"2\">\n<p style=\"text-align: center;\"><b>ALSO READ<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/major-minor-and-exotic-currency-pairs\/\" target=\"_blank\" rel=\"noopener\"><b>Major, Minor and Exotic Currency Pairs Explained\u00a0<\/b><\/a><\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/what-is-a-pip-in-forex\/\" target=\"_blank\" rel=\"noopener\"><b>What is a Pip in Forex?<\/b><\/a><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/how-to-read-economic-news-for-forex\/\" target=\"_blank\" rel=\"noopener\"><b>How to Read Economic News for Forex<\/b><\/a><\/p>\n<\/td>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/fixed-spreads-vs-variable-spreads-in-forex\/\" target=\"_blank\" rel=\"noopener\"><b>Fixed vs Variable Spreads in Forex<\/b><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/leverage-and-margin-in-forex\/\" target=\"_blank\" rel=\"noopener\"><b>Leverage and Margin in Forex\u00a0<\/b><\/a><\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/swap-charges-in-forex\/\" target=\"_blank\" rel=\"noopener\"><b>Swap Charges (Overnight Fees) in Forex<\/b><\/a><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/types-of-forex-orders\/\" target=\"_blank\" rel=\"noopener\"><b>Types of Forex Orders: Market, Limit, and Stop Orders Explained\u00a0<\/b><\/a><\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/explore\/stock-market\/tradable-instruments-in-forex\/\" target=\"_blank\" rel=\"noopener\"><b>Tradable Instruments in Forex: Currencies, Gold, and Indices<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Open any forex platform and you will notice something odd: every currency pair shows two prices, not one. There is also a setting called &#8220;lot size&#8221; that decides how big your trade is. Understanding these four terms is the first step before you place any trade, even a practice one. What is Bid in Forex? [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"template":"","meta":{"_acf_changed":false},"curriculum-category":[111,112,172],"custom_linking_tags":[],"class_list":["post-2640","curriculum","type-curriculum","status-publish","hentry","curriculum-category-stock-market","curriculum-category-stock-market-tutorials","curriculum-category-forex-terminology"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bid, Ask, Spread and Lot Size in Forex Trading - Entri Free Materials<\/title>\n<meta name=\"description\" content=\"Learn what bid, ask, spread and lot size mean in forex with simple EUR\/USD examples, a lot size table and quick FAQs. 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