What Is the Ask Price in Trading? Definition, Function, and Its Role in Buy Orders

Definition:

The ask price is the lowest price at which a seller is willing to sell a financial instrument, such as a currency pair, stock, or commodity.

Explanation:

In trading, the ask price (also known as the offer price) is the price at which you can buy an asset. It represents the supply side of the market and forms one half of the bid-ask spread:

• Ask Price → what sellers are asking
• Bid Price → what buyers are bidding

In Forex trading:

• A Buy (Long) trade is executed at the Ask price
• A Sell (Short) trade is closed at the Ask price
• The difference between the Ask and Bid is the Spread, which represents the trading cost

Understanding which price applies to your order type is essential for precision in trade execution and calculating entry/exit levels.

Example:

If GBP/USD is quoted at 1.2740 / 1.2743:

• Ask Price = 1.2743
• If you open a Buy position, it executes at 1.2743
• If you close a Sell position, it also executes at 1.2743
• The Bid price (1.2740) is used for opening Sell positions

Related Terms:

Bid Price, Spread, Buy Order, Execution Price, Slippage, Market Order

Category:

Trading / Price Quoting

FastPip Tip:

Buy trades always open at the Ask and close at the Bid. Know your pricing structure—especially during high volatility when spreads widen.